Sometimes I Feel Like a Piece of Bologna

Social Security Going Bust Faster than Expected

According to the New York Times, the bursting of the real estate bubble and the ensuing recession have hurt jobs, home prices and now Social Security. This year, the system will pay out more in benefits than it receives in payroll taxes—an important threshold it was not expected to cross until at least 2016, according to the Congressional Budget Office.

It seems that payments have risen more than expected during the downturn, because jobs disappeared and people applied for benefits sooner than they had planned. At the same time, revenues have fallen because there are fewer paychecks to tax. Analysts continue to try to predict the year when Social Security will pay out more than it takes in because they view that threshold as a tipping point — the first step of a long, slow march to insolvency unless Congress strengthens the program’s finances. And how can they since they are already increasing taxes for health care?

As we Boomers hit retirement age, it’s tempting to apply for benefits in hopes of recouping at least some of what we’ve paid in over a lifetime of work. More so if your income has taken a hit from job loss or cutback. Frankly, I don’t expect to collect even a small percentage of what I’ve paid in, even if I were to start collecting now. And our kids will never see what they are paying in now.

When will we learn that we can’t support everyone in the manner in which we’ve become accustomed? Social security was a flawed program based on flawed premises from the beginning. It has created at dependent class of people who haven’t planned well for their retirement, assuming the government would take care of them. (It was never supposed to be more than supplemental income, but quickly morphed into total dependency for many seniors). Its costs have exceeded projections from the beginning and depending on Social Security has reduced self-responsibility in a generation of people. On one hand I’m glad my mom has Social Security, but on the other hand, I know she’s collected far more than she’s paid in. It’s a nice luxury, but can we afford it for our generation? Or do we need to reconsider? What do you think?

Labels: Social Security