Image via WikipediaSocial Security is necessary part of any modern civilization. Without it a portion of the population would live below the poverty line and worse. The standard rhetoric is that you should be responsible for your own retirement years by saving and preparing. I agree with this premise because through your working lifetime you should live within your means. Setting aside the necessary money in IRAs and other saving instruments. In a perfect world this should be the goal.
We don't live in a perfect world. We have members of our society that will never save a dime. Never prepare or give a thought of what would happen if they became disabled. They may never have the income to save. What should we do, let them live in poverty? No, that's where Social Security comes in.
We know where Social Security gets it's money, us. But do you know who the money goes to.
The facts are that without Social Security many retirees would be living below the poverty line. Under the current circumstances that is not going to change. The policy makers in Washington must remember these issues.
• Social Security benefits are quite modest.
• The majority of beneficiaries have little significant income from other sources.
• For most seniors, Social Security is the only income they will receive that is guaranteed to last as long as they live and to provide full inflation protection.
• Social Security benefits in the United States are low compared with other advanced countries.
• Future retirees already face lower benefits (relative to their past earnings) than current retirees as a result of a rising Social Security retirement age and escalating Medicare premiums.
In the United States Social Security benefits as a percentage of income are quite low.
The facts are that Americans 65+ live richer lives thanks to Social Security. According to AARP 54.8% of retirees are in no danger of poverty because of Social Security and retirement savings. There are 35.5% of retirees not living in poverty because of Social Security. Sadly, 9.7% of retirees taking social security are still living below the poverty line.
When Franklin Roosevelt enacted the Social Security Act in 1935 he called it" a law that will take care of human needs". For 75 years, starting from the Great Depression when more than half of American elderly couldn't support themselves this coverage has provided a economic safety net for retired and disabled workers and their dependents. Today Social Security puts out 50 million checks every month. If it wasn't for those checks at least a third would live in poverty.
To fix Social Security doesn't just require acquiring more funding. We have to address the great need that requires it's existence.
So true. Social security also frees up jobs for the 'young' that would otherwise be held by those who are retirement age. It helps keep the economy and job sources in motion. But... I think in the coming years people (including my generation) will have to learn to rely less on SS as a main source of income and more so as a supplement, especially if we wish to lead relatively financially stable lives.
ReplyDeleteI agree. I just wish that payroll taxes had been spent solely on Social Security and the surplus invested rather than politicians taking the surplus to fund other programs. If the surplus had been invested it wouldn't be an issue now.
ReplyDeleteSocial Security is one deeply flawed program. The finances don't work long-term, and you have to be nuts trusting politicians with large sums of money; they only know how to do one thing... spend, spend, spend. The twenty-somethings now contributing to SS will likely experience negative returns on their money.
ReplyDeleteUp to this point, it's been an ok deal for retirees, but the future looks very dim. Anyone counting on SS is in for a rude awakening in 30 to 40 years.
At the rate thing are going, SS may exist but with lesser benefits. I wouldn't count on it.
ReplyDeleteThe data shows that people are relying on it more than ever. They aren't preparing for old age. They live paycheck to paycheck with no thought of the future. Without social Security they would be homeless. The worst problem with social security is people rely on it to much.
ReplyDeleteWho ran the US into the ground for decades and ruined it for us?
ReplyDeleteWho turned the US from the largest creditor nation in history into the largest debtor nation in history?
Everyone that voted for Reagan, Bush and Bush again deserves a bill for the damage they have done to the country.
Also add to the list Obama.
ReplyDeleteWhat a total crock of bullshit! Look at the chart, Greece and Spain are considered "advanced countries"! There is a price to pay for socialism!
ReplyDeleteWhen people say that Americans don't save and invest adequately for retirement, I wonder how much they expect minimum wage workers to save.
ReplyDeletePeople who earn minimum wage never buy homes, which means that over a lifetime, they probably pay considerably more for housing that those who own homes for most of their adult lives.
This in turn, hampers the ability to save for retirement, and there is a vast difference between paying half your income for rent at retirement age and owning an unmortgaged home at retirement age.
Your right about minimum wage workers basically traped all their lives in poverty. I can't do much for them but in my own home I can influence my own children to strive for professional jobs that pay an upper middle class wage.
DeleteI was never preached to about this subject and I paid the price over a lifetime. What happened in my life I will not let my children make the same mistakes.
We have the power to influence people around us, to educate, and train for jobs that pay a good wage. Naturally, in a free society we able to make poor choices and pay for them the rest of our lives.