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Subscribe to RSSUpdated 4:05pm ET The trustees of the Social Security system said Monday the fund that helps sustain retiree and survivors’ benefits will become exhausted in 2033, three years sooner than they projected last year.
At that point, payroll taxes and taxation of Social Security benefits will provide only enough income to pay about 75 percent of the benefits that Congress has promised to retirees and survivors.
In practical terms, this means that a 40-year-old worker who is eligible to collect retirement benefits in 2039, would see his or her expected retirement benefit cut by about 25 percent, unless Congress took action to change the program’s funding or its benefit structure.
The trustees attributed a big part of the change in their forecast to “slower growth in average earnings, lower interest rates, and higher unemployment rates due to a longer period of recovery from the recent recession,” as well as to a 3.6 percent cost-of-living increase in Social Security benefits last December.
Last year, Social Security paid benefits of $725 billion. There were about 55 million beneficiaries.
In their annual report, the trustees also estimated that Social Security’s Disability Insurance fund will be exhausted in 2016, two years sooner than last year’s estimate. Congress will need to take action to avert that outcome, with the most likely remedy being a reallocation of the payroll tax between the part of the tax that supports Social Security’s retirement and survivors’ benefits and the part of the tax that pays for disability benefits.
The Social Security system does have assets in the form of $2.7 trillion in Treasury bonds -- but those assets must be redeemed – cashed in – in order to pay benefits.
“The redemption of those bonds can only occur out of current income,” explained Senate Budget Committee chairman Kent Conrad last year. “The general fund has been borrowing from Social Security and we've borrowed well over $2 trillion,” he said. “That money has got to be paid back. How's it going to be paid back? It's going to be paid back by the other general expenditures of the federal government having to be reduced to make way for the payments that we're going to have to make on those bonds.”
The trustees said that to keep the Social Security trust funds solvent over the next 75 years, Congress could take a number of steps:
- increase the payroll tax rate from its current level of 12.4 percent to 15.01 percent;
- reduce benefits by 16.2 percent;
- find alternative sources of revenue;
- adopt some combination of these approaches.
Separately, the trustees, who are also the trustees of the Medicare program, reported that the Medicare fund that pays hospital costs for older and disabled Americans will be exhausted by 2024, the same forecast as they made last year.
After the assets of the Medicare fund are gone, if Congress were to take no action, projected Medicare revenue would be adequate to cover 87 percent of the estimated spending in 2024 and about two-thirds of projected costs in 2050.
The trustees’ report underscored the need for Congress to either change the funding of Medicare or curb the increasing cost of the benefits being paid out, or address both funding and benefits.
Reaction to the trustees’ reports varied widely along the ideological spectrum.
Jason Fichtner, a senior research fellow at the free-market oriented Mercatus Center at George Mason University, said the report showed that Social Security will be facing an increasing mismatch between taxes being paid in and benefits being paid out.
“The longer we wait, the higher the tax rate is going to have to be to make up the difference… This is a big shortfall and it's just going to get larger with each passing year if we don’t do something to reform Social Security,” he said.
House Democratic leader Nancy Pelosi said, “Despite the repeated efforts of Republicans to privatize Social Security and end the Medicare guarantee, these vital initiatives remain strong. Today’s Trustees’ report affirms that Social Security and Medicare will continue to provide critical benefits to seniors and other Americans.”
AFL-CIO President Richard L. Trumka said in a statement that the report “confirms that Social Security remains a vibrant, strong, and durable program….The Social Security surplus is large and growing. Despite lower than expected wage and economic growth and unexpected increases in the cost of living, Social Security will be able to pay full scheduled benefits at least until 2033 absent congressional action.”
He pledged that the labor union confederation “will oppose any Social Security benefit cuts, such as a reduction of COLAs (cost of living adjustments) or an increase in the retirement age, no matter who proposes them.”
But Maya MacGuineas, president of the Committee for a Responsible Budget, saw the trustees report as “a good reminder of what we've known for decades now -- that the Social Security program is on a troubling path and must be reformed. Time is not on our side, and the longer we wait the harder it is going to be to fix this program."
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NOW is the time to start some serious means testing for ALL folks receiving any social security funds. It is reprehensible to charge today's workers (many of whom face a life of poverty at retirement age even IF social security were to remain solvent) for benefits paid to those who are not truly in need.
And before you bring the usual, "but we paid the money in, it's OURS," response, please keep in mind that MANY people pay a LOT of taxes and fees for the benefit of others than themselves, and will never see a dime of those funds. And those who are working hard, often at lower comparative wages than the previous generation, will retire to hunger and despair. Let those who have great wealth and substantial pensions live a bit leaner so that the folks who will be paying into SS for decades more can have SOMETHING at least.
Yea i believe piglosi and the head of the unions instead of the experts saying it's going to be gone
No that long ago it was stated how some of our politicians 'stole this money', why were they not prosecuted? This money is' not given to Seniors it is from what they "pay in all the days of their lives' while working hard, like a savings account" Many people do not know enough to save and would not do it and yes it was a newer thing started early in 1900's perhaps, but yet it is needed ,or our people would be on 'welfare. 'We do not want all the people on welfare or do we?
Many years ago the younger generation used to c are for elderly parents and now they will not and often now they are just "cutting them off" and not even talking to them if they do not like something they said or did. Never was that stuff hardly heard of In just one generation ago. I took care of grandma and my mom and Dad and now mother in law. Standing beside them and trying to work on the side and then was ill myself in time. One person cannot do it all and raise a family and keep a clean home . But families were larger and people took turns taking car of elderly parents and I saw it with y own eyes with my family. We just never placed them out to Pasteur.
But life is busier and people work to live and that is what they must do often twelve hour days and never seem to be home, and do not have large enough homes often to take them in. So should they when old live on the streets?
I guess we had best think of'' newer ways'' to take care of elderly family members ,and find these 'farms broken down and lost in time,' (Does not need to be a working farm either of course although maybe could have chickens and gardens IF any of the residents are "able" and "willing" to take care of that part of it making groceries cheaper and also they hopefully would enjoy that... and 'fix them up' and allow people to run them, with CEO'S who have had some training in elderly care and can learn the office work for admissions and death forms and what to do.. etc of what needs to be done with Medicare and/or Medicaid if the person has any and whatever else would be needed to 'train maybe for a few weeks 'or so training, but 'experience in some kind of nursing 'before' being head, 'of it all... Not needing Nursing degrees though if more of an adult care facility??? We need many more places to house our elderly and care for them very cheaply. This kind may allow the people to stay even if needing Nursing care , as long as not beyond the scope of general care family members would be able to learn to give.. Allowing those who can ,to work outside maybe even part time, and those who can at least take care of house or gardens or care for those getting to point of not being able to do anything , then they can care for them and some to cook and some to shop, maybe>? Even some may drive and run some to Dr's.
The main employees could be the ones who clean the harder work of it,( Some hired during day only for this) and someone who (oversees it all on each shift. )Seniors may not go into assisted living anymore to receive as 'full a care of all things as now', but all can do as possible and make it work with maybe less employees needed, (Maybe some money will need to come from government and some from those in the home who can work to keep it a home for all, but after all they paid in all their lives to have this home..and it would be more like just having family, and living at home with your family ,and being part of family, as maybe they would have done some things if they could even in home of family? Yet when too ill, they know they will be kept comfortable, and safe and taken care of as they have done in their lives all they could for other's also.
I know I personally, cannot afford to buy up a farm ( although cheaper in my small town area than maybe most places) But it would have land, and places to walk around in country setting and maybe no pollution, and maybe safely live out their lives ,if they have saved some money but cannot say they could afford much of anything . But those working may need to pay utilities and taxes with discounts or something must be arranged by government?
If family and churches can no longer care for their own then who will? As you get into your later 50's and 60's on, I know that people 'struggle much more to work and survive', and yet 'want to be independent.' Bodies break down and maybe even minds to some degree and they cannot help It, it will happen to even the younger generation who tossed family away. Perhaps that is only time they will see what has happened and how it is to be left and to struggle to make do financially, etc.
Only a few do stand the test and can live home even with all the gadgets IF they have family to run errands and buy groceries and help as they age or they get places in assisted living or nursing home etc. Most always on welfare and needing Medicaid at the least as I know around here no one can afford even the $2-3000. a month or more. Not counting if they need hair done or anything more they must have their social security money for family putting some in ,to help.
I know all of this as have done nursing and cared for elderly in and out of hospitals, nursing homes and assisted living facilities since sixteen years old!It is more and more expensive , and most do not receive much and certainly receive much less than they got when working once they retire.
The money was taken out of the funds in our government and perhaps they expected to give it back but never did and things like this is why we are where we are headed. If this younger generation must pay IN to the system and have it taken out of wages, they would expect it back when retired! Like a "savings account" of its own. It is hard for many to save when they have families as they do not seem responsible enough if they are not living with over maybe $200-200,000 a year! Most people I know make $20-30, 000 and some less in my area, maybe. My husband and I have been married forty-four years, and together this is all we would make,( before retirement.) After we would make ,maybe $16-17,000. This is an average person working with higher rates in our area too. Not just minimum wage.
Many with college degrees cannot find a job, and thus not working at all and very young. They will be in rough shape one day and wasted all the years in college only to find with such stiff competition now out there they do not stand a chance. They get depressed am sure. Thank God some got ( many really who have come here from other lands especially) will get "free" education and will hold the mass amount of our jobs after college.
My husband and I are two of the "baby boomer's" and have paid into this system ,to get out retirement money and even disability if needed for years, since early teen years ,we have worked for our money.No one is freely given us any hand outs. It was set aside for this very purpose.
But if we are going to be in such problems in the future then consider what I say about having government buy up these old farms or people who can, get them into order for state requirements and make better living for our elderly population so it is a home ( maybe not as nice as being truly in their own homes) but a place where they can feel safe and be taken care of in some way?Each home ca have at least one CEO, and maybe someone to cook and clean at least and seniors who are young enough and do not mind could work and bring in enough to pay utilities and one day when they cannot do it someone younger hopefully can take their place with all for them willing to help out as needed and as they can. But the CEO will need to hire one person for each shift to help out with baths and care as such and giving medicines, and doing what needs to be done and making judgments if hospital visits are needed. How that can be paid for will be my next series.. LOL I do not have millions of dollars ,as have not won any lotteries to be in charge myself of this kind of thing.But we surely will need many more senior living quarters of some kind and with willing people to do their part I guess? Maybe some church people would come in and volunteer time for activities or anything as such? Ministers for church services, and setting them up much like the State requires it to be now. But many more and adjusting how it is paid, by what the elderly are able to do and those who cannot pay would still have a home to live in , maybe they could do something to help in the home for their part? Once they cannot then people are there to help them out.
I guess I see it as a Compassionate Home For The Elderly!" Where all people do their part to save each other from living on the street and struggling so much to survive if they cannot stay at home at all as they do not even have family who care as they have "cut them off",or not able to help them? The "cutting Off older parents is an epidemic now. I have been reading about this and seeing myself how it works. Unbelievable and foreign to me. Unless they were molesters and criminals , it is hard to understand?
Thank you for reading and considering my thoughts.
As much as families cannot seem to do it now much ,and it will maybe get 'much worse later 'because children learn from what they see more than what is told to them.
Yes, I am a quiet observer ,of what is going on.
Hang in there,I have a feeling you will always be ok!
For all of you who think full employment - which, by the way, is defined as 4% unemployed - or the expiration of the tax cuts will "fill the coffers", think again. Demographers have been warning us about this problem for over 50 years. The only thing partisan about the problem is that partisan thinking keeps us from addressing the problem. The bogus and misleading attention given to "the 1%" diverts our attention from analyzing the actual issues. CONFISCATE ALL OF THE WEALTH OF THE 1% AND IT WOULDN'T BE A DROP IN THE BUCKET. Thats right. Warren Buffet and Bill Gates together are worth less than 100 Billion. Take all of them together, take everthing they own and we still have a deficit - and the following year there won't be anything left to take. The middle class and the blue collar class are going to have to participate in solving the problem. If you look past the campaign rehtoric, we already are. Seniors, under ObamaCare, are already paying a hidden 15% tax on medications. The drug companies collect it and rebate it to the government for use in the general fund - not Medicare. If the President's energy proposals go through we might get the $9 a gallon price his energy czar wants us to pay for gasolene. Do you think 5-10 dollar a gallon gas will hurt the rich. Of course not, but it will help kill the middle class, suburban homes, and private single family homes in general. We are witnessing one of the greatest feats of misdirection in history. All the hidden fees and rate increases that are occurring are hittng the middle class, not the rich - who incidentally are contributing heavily to the Presidents re-election campaign and most of his financial advisors come from the very banks and financial giants he demonizes verbally but about whom he seldom does anything . The Social Security fiasco is just exactly what we have been warned about for years. Some form of privatization was originally the suggestion of Senator Moynihan of New York. Senator Clinton replaced him when he retired. They are both, of course, democrats
You forgot President Bush also wanted to allow a portion of collected SS monies to be privately invested at the direction of the future recipients!The Senate thinker,Barbara Boxer,stopped a vote on this plan! So,it's not just democraps that have pushed privatizing SS!I wonder why big unions are opposed to privatization of SS.Hummmmm!
The Feds screwd the SS system just like the USP by not keeping their hands off the money. This has been going on for years and we as a people will really get screwd for it. Not the morons in government.
If they predict 2033 then 2025 is more like the reality...this country is going down like the titanic...lmao
I think the Titanic had a better chance.
How can Pelosi and Trumpka say that this article proves that Social Security and Medicare are on solid footing? Didn't the article say that the fund is going to be depleted or benefits would be reduced by 25% once a 40 year old reaches retirement unless changes are made? How does Congress expect the American public to trust it if it thinks it can not only manipulate the numbers but it can also manipulate math. Either the article is false or Pelosi and Trumpka are stupid. A depleted fund or a reduction is benefits is not equal to everything is fine. Is 1 + 1 now equal to 3? I know that Pelosi is not the brightest bulb on the circuit but this takes the cake. What are the voters in San Francisco thinking when they keep sending her back to Washington?
Several things need to take place so social security provides for retirerees. First they need to raise social security taxes 1/10 of a percent per year for 10 years. Second they need to take social security taxes out no matter how much people make per year. And finally they need to get about 90% of the people off S.S.I. who claim they can't work any more when in reality they can. I know of several people who collect disability payments when they can acutally work and there is nothing wrong with them. I'm sure there are a lot of you out there who know of people doing this. To me disability is for someone who is bed ridden and doesn't have the ability to work with their arms and legs, not just someone who is to lazy to work for a living. These are things that need to change so everyone will have social security to look forward to.
Also for those of you 'OLD FARTS' that say increase the retirment age etc. its people like me the 40-somthings that are carrying the young and old alike - - we didn't creat this mess we jsut have to pay for it. The young people want a hand out just like the older ones - my parents just now hit SS age - in 20 years I have paid in more than both of them combined yet - tehy are going to see the same amount of money that I am "supposed" to get 24 years from now. I am sick and tired of working my butt off just so other people can feel better about themsevles. I am not rich and I am not poor either - I am in that range were everything costs me more. I make to much to discounts - I make too little for everything I have to pay for not have an impact. I can't afford to send me kids to college but I make to much for them to get assitance - the world has put people liek me in limbo so the rich can get richer and poor get handouts - as long as this disparty exists we will never improve. I have a sister in-law who lives on on SS she gets for her son because her ex husband did - I truly believe the she SHOULD get this money for her son - the problem I have is she pays in ZERO dollars in tax and gets a refund of 2k or more at the end of the year - I claim Married Zero on my taxes and get less back than she does - BTW the I claim 5 dependants at the end of the year - so tell me where are the tax cuts at for those of you mumbling about that. I get so tired of hearing about Democrats and Republicans who is right and who is wrong - they are all crooks who keep stealing more and more and more until we are over worked and stressed out. IF the governement wants to do something - put a cap on the hours worked stop killing people and woohoo you just created a few million jobs by doing that...instead they are lining thier pockets with money from Big Business who wants zero restrictions on how to treat employees - look it up there are only 13 states in the US that actually require lunches and breaks --- yeah that right the 37 can leaglly work you 24 hours a day 7 days a week if they want to and if you dont like it you can quit.
I know I sound bitter and upset - its because I am I am sick and tired of hearing bad news about how I am about to screwed more by the government - who sits on thier butts and get paid to do nothing - if I did my job like they do I would be fired immediately.
If the Government would stop using Social Security funds to fund all of their pet projects and put the fund BACK INTO its' separate area where it would be off limits to the "deficit spending"politicians, then the people who have WORKED and PAID into the system would receive their benefits. At this time, Social Security taxes are just another income for the Federal Government to spend and then they come up with Oh, by the way, we have spent your Social Security money and we can't put the money back, so we will steal it by saying the fund will run out of money in the near future. You the retiring American citizen will have to start eating cat food, while we the politicians continue spending your money to "WIN" votes from illegals, non-working people, and any other group that can be identified as potential votes. Our political system is being used against now, instead of how our founding fathers set the system up.
Here's the really far out idea...
Tax the church. See that the rich pay their fair share of taxes, too.
There are going to be an awful lot of republicans eating dog food in 20 years because they don't think that's a good idea now. Democrats will be doing the same, but it won't be their fault. Poor you guys!
The top 10% of taxpayers pay 55% of all taxes,last year and every year! How much did you pay,last year,genius!
Yes, but they earn (or not!) 90% of the income, dummy. You do know how math works, right?
I paid my fair share. How much did YOU pay?
In 1981, three counties in Taxes had a chance to opt out of social security and it! It's commonly referred to as the "Galveston Plan" that includes Galveston and two other counties.Included in their plan is life and disability insurancse and life time coverage for a spouse in case the principle dies! They have an option to be paid out in one lump sum,over 10 years or over their life! In all three examples,their system completely out proforms SS.They basically invested in stocks and bonds! President Bush proposed a similar program for SS where future recipients could take a portion of thier paid in SS funds and invest in low risk securities and bonds! But,the libturds,lead by no other than the genius,Barbara Boxer,fought to keep it from being voted on the Congress!Privatize,SS! An idiot can make a higher return on money than the federal governmant been making!
You obviously skipped math class.
Bush tried to implement reform and was pilloried by jackasses like Pelosi and Reid (dumb and dumber). Now, with no efforts to fix this and dems still syaing SS will remain solvent, the truth comes out. One more lib lie.
I was around back in the fourty's. I rember hearing the old folks discussing,Social Security. From what I can remember, It seems that the working poor had no form of retirement. I remember hearing them discuss the two words and thier meaning. Social and security meaning what?
It's simple...for my entire working career I paid in to the Social Security 'Trust' (50+years) and the government went out and spent MY money on things I did not authorize them to spend it on ...MY money!
It's NOT their money! It's MINE! Thieves!...Yes they are all T H I E V E S & Crooks & LIARS...
You will not give me MY $ ...then I'll TAKE it!........stop me....
The tax cut Obama brags about is a cut in what people pay into social security---------MORONIC!
What i would like to know is where did the money go that people put into it for 40 to 50 years and died,never useing there social security?
Lets end the S.S. system and Medicare systems now, it's only poor people that make below $1 million that want the system to continue.
So, you don't think it's a good idea to re-distribute the wealth? Neither did the ruling aristocracy of France.
Time to drop that job creator tax rate lower than it is, that'll fix it. Then cut grandma's social security, she can get a job to make up the difference. Please don't touch members of congress platinum socialist pension or socialist healthcare they have paid for with tax money for life, that needs to be fully funded. Now go buy another suit that would feed a family of four for 2 months. It's only socialist if you non job creators receive socialist programs, if members of congress receive socialist benefits it's called a compensation package.
How about stop receiving a paycheck and use that free market you talk about to buy your own health insurance with your OWN money.
The millionaire tax won't gives us squat toward this problem. We are in way deeper weeds than that
How is did going to happen, I have paid for almost 35 years. Where my money? Stop paying people who are in office a life time retirement for only serving for 8 years or 16 years? You could pay the money back the House & Congress spends on personal trips, homes etc. Why not make them pay into retirement funds like the rest of the hard working people of the U.S.A.
Stop paying the ones who come over to the US and they work for 5/10 years and make more money than my mother who has been and RN Nurse all her life.
Why should, Social Security, be for anyone earning, annualy, seventy five thousand and up on retirement?
This same article comes out every single year and nothing has ever been done about it.... so come up with all the brilliant ideas you want, what will be done? Nothing.
President Carter raided the Social Security fund for a source of funds for the immigrants and these people never paid a penny into the SS fund. then the druggies and lazy people got on the dole and nobody asks why. I for one am getting disgusted that I am so honest that I go to work so the people on welfare can get their check. They get medical insurance for free that I have to pay my hard earned dollars to my employer. Sorry to say there are generations of these people that will never work an honest days work in their lifetime. They depend on me and when I retire they can look elsewhere as I am not a cookie jar to pay for their illegal drugs. I dont quite understand why my celphone bill is raised to provide free celphones to these worthless trash . My celphone will be in the recycle bin trash the day I retire so don't call me.