Social security is expected to go broke in 2041. The government isn’t prepared to deal with the reality of a very retired population propped up by a much smaller population (Gen X and Gen Y). For all the complaints that Gen Y is the “Entitled” Generation; the Boomers may have to take a look at themselves when it comes to Social Security.
There’s a really thorough article on Social Security over at wikipedia.
The earliest age at which (reduced) benefits are payable is 62. Full retirement benefits depend on a retiree’s year of birth.[27] Those born before 1938 have a normal retirement age of 65. Normal retirement age increases by two months for each ensuing year of birth until the 1943 year of birth, when it stays at age 66 years until the year of birth 1955. Thereafter the normal retirement age increases again by two months for each year ending in the 1960 year of birth, when normal retirement age stops at age 67 for all born thereafter.
Don’t get bored yet.
In 1938, American-citizens had a life expectancy of about 62 years; social security kicked in 3 years after you were likely to be dead. Blacks were particularly shafted by this government policy since they were averaging 53 years.
Fast forward to 2004. Full Social Security benefits kick in at age 67. American citizens average just under 78 years (~75 years for men, ~80 for women). This disparity between blacks and whites is closing a bit, with an average of ~78 years for whites and ~73 years for blacks; women continue to outlive men regardless of race.
So in the beginning the government offered to take care of its citizenry starting 3 years after more than half of them would likely be dead, but today Social Security kicks in 11 years before the average citizen abandons his mortal coil.
I’m not suggesting that the new retirement age should be 81, just pointing out that it’s no surprise Social Security is hurting, since Americans have grown increasingly dependent upon a check that was originally meant to help out those with impressive longevity, not be an expected source of income.
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I would think that if you pay into a benefit for 40 years you have the right to reap its rewards and not be called a moocher when you do. Social security is a lifeline for millions in a climate where a tiny minority of employers offer pensions, and pay for millions is barely enough to cover living expenses, with nothing much left for investing. Plus investing opportunities for many such people such as buying a home has become another vehicle for corporate theft (look at the foreclosure crisis).
Renata,
Thanks for commenting.
When SS went it to place it was under the guise of providing for the citizenry; whereas realistically most people wouldn’t ever be able to collect, so it was a way of padding the budget for other government expenses.
Some of my content gets syndicated over at BrazenCareerist. It seems to have struck a nerve there too.
http://www.brazencareerist.com/2008/04/03/social-security-was-never-meant-to-be-a-true-source-of-income/
Feel free to jump into the discussion!
I am of the opinion you voice in this article. Social Security was the product of a different time, and it needs to be at the least reformed, if not totally disposed of. I don’t say that from selfish motives. I don’t want to get anything from the program for myself. I would rather have the ability to invest my own money and prepare for my own future. That way the money I have to use when I retire will be my own money instead of some unspecified amount the government gives me.
There are plenty of people who depend on the system, and plenty more who have been paying into it for years. The result is that this is a problem which lacks a simple and totally satisfactory solution. But it does need innovation at the least.