Did the government make a Social Security goof?

Academics warn that agency officials are using outdated calculations and have severely overestimated the money available for retirees.

By Bruce Kennedy Jan 8, 2013 12:32PM

Image: Social Security Card (Comstock)The fiscal cliff has been averted for the moment, and Congress is continuing its latest game of financial chicken with a new target in sight: the upcoming debt ceiling. But two academics say all this political brawling is taking attention away from another crisis looming on the nation's horizon: Social Security.


Samir Soneji is a demographer and professor at the Dartmouth Institute for Health Policy and Clinical Practice, and Gary King is a professor of government at Harvard. On Sunday, the two boiled down their recent findings in an opinion piece for the New York Times.


According to King and Soneji, the Social Security Administration has grossly underestimated the money it needs for retiring Americans "to the tune of $800 billion by 2031, more than the current annual defense budget."


And if nothing is done, they say, the Social Security trust fund will run out two years ahead of current government predictions.


The professors say two major issues have led to these serious miscalculations.


The government’s forecasting methods for Social Security have barely changed since the program’s creation during the Great Depression -- "even as a revolution in big data and statistics has transformed everything from baseball to retailing."


And that outdated mode of forecasting, the professors note, has failed to take into account crucial factors about longevity -- especially the fact that Americans are living longer and healthier lives. Better treatment of cardiovascular diseases and a dramatic decline in smoking, they say, "are adding years of life that the government hasn’t accounted for."


The professors believe the nation faces some stark choices if Social Security is to be saved. Among the options they suggest are raising the retirement age to as high as 69 or 70, increasing payroll taxes, limiting annual cost-of-living adjustments and reducing benefits.


They also point to new research that suggests that retirement, while popular, may in itself reduce a person’s life span "by breaking lifelong routines and disrupting deep social connections." And with that research in mind, they wonder if retirement should be optional.


Given modern demographics and statistical analysis, professors Soneji and King think now is a great time to open a public debate about Social Security’s future. The constant political bickering in Congress may make this suggestion seem odd, they say -- but "the longer we ignore the problem," they warn, "the more disruptive any change will need to be to keep Social Security alive."


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996Comments
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my husband and I live on SS only==we both have no pensions. if ss goes belly-up, we will be homeless but what do the politicians care. Way too many young people get ssi--some are deserving but some are**** *****!. after you reach 50, you can't get a job even at wal-mart!!!
Jan 8, 2013 4:13PM
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there are plenty of small businesses that hire workers and pay them cash without benefits including paying into SS. When any of these workers retire, become ill or suffer serious injury and need SS, their employer is the one being fraudulent. There needs to be a crackdown. Go to any bar or restaurant and ask is the employer pays them in cash! Most on disability have paid into it until they couldnt, i would not wish illness on anyone or want to live on a limited income because of an illness, but working and not being on the books is worse!!!
Jan 8, 2013 4:13PM
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It's a Big Lie that Social Security was meant to provide retirement benefits for only a few years. In 1983 Social Security payroll deductions were sharply increased to the extent that the total now equals 12.4% of  salaries & wages up to approx. $113K. This is roughly equal to the maximum one can contribute (15% max) to a 401K plan which is meant to cover lifetime retirement. It is very reasonable for Baby Boomers to expect that Social Security benefits will be available for their lifetimes. After all, they have been contributing to the program at a high rate for 30 years!!!  The government repeats the Big Lie because it intends to default on it's obligations. American Values these days mean that war is more important than pensions for senior citizens. More than a trillion dollars has been "borrowed" from the Social Security trust fund over the years in order to pay for wars.  That's the Big Truth here. 
Jan 8, 2013 4:13PM
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My father was a disabled vet who died before collecting SS, my mother died within a year of starting to get SS from  my father's pay ins to SS and both my sisters and I never married or had children so we'll never get anything if we die before retirement. Many singles die before retirement age, with no children ,no one related to them, no one collects a dime. I am disabled but had to be unpaid caretaker to my grandmother, No assissted living in those days and nursing homes had 2 year waiting lists. I was also caretaker to my mother as she also died. I never did drugs, alcohol or illegal, why should I be punished. The government didn't take care of my relatives -I did and it broke us financially. I've never been able to afford to get even a cheap car and must cut my own care. Try living on $653 disability in abject poverty and see how fun it is Congress!!!
Jan 8, 2013 4:11PM
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Who doesn't know our government is nothing but liars and self promoters. Please tell me when the last time they did anything right. I can remember Kennedy putting a man on the moon in the '60's, and the 401K saving the banking industry in the '80s. After that I'm lost for anything positive. That's decades of our own government working against us.
Jan 8, 2013 4:09PM
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I get the impression that everyone thinks that social security recipients are living high on the hog, just raking in that large check every month. Contrary to that assumption, most of us are scraping by, wondering how to stretch that money for an entire month. Those of us who had physical occupations are now afflicted with arthritis, bad backs, bad shoulders and other assorted maladies. The idea that we could have worked longer is ridiculous. Let the rich people who supposedly represent us live like we must live for a few months or perhaps the people who's opinions are represented here should consider

their own parents or grandparents who live in poverty. As for the **** who badmouthed AARP, I have no doubt that you are a good teabagger. Just remember everyone gets old and financial crashes that your ilk perpetrated on this country take money from everyone whether you had savings or not.

Jan 8, 2013 4:09PM
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Holy ****.  Like this is not a surprise.  Idiots in Washington can't balance a budget and they want to tell us how to live.  IDIOTS!!
Jan 8, 2013 4:08PM
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How to save S.S., First you go back to 6.3% deduction from the employee matched by the employer, Second ALL income will be included for s.s. purpose not cut off at $106,000. if you  get paid $500,000 a year you pay on that income of $500,000. x 6.3% = $31,500. there would be NO cut off amount. Millionaires would have to pay on all stocks received in lue off cash. BUT tax rates for income tax would be reduced to a flat rate for those making over$100,000. @7% and congress could not spend more than it has coming in.corp. tax rates built in america would be 10% built in or imported from another country would be 20%. and ALL politicians would be paid by how many hours they  REALLY do work. if you don't show up for work you don't get paid. CLOSE up all pork barrels and start over on the tax codes. The only deduction for business would be the cost of equipment & labor and NO PERSONAL cost for operations (no dinners,games,personnal escorts,) corruption run amouck in D.C. and america because of tax write off this needs to STOP!!!
Jan 8, 2013 4:08PM
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This is BS,,,if ss is low its because its robbed weekly! Now look here, ss is a stable program that has montly revenues from ALL of our checks taken out EVERY WEEK and going into the ss pool,,,,the politicans need to stop fn around and really effect some change, this is getting old and ridiculous! We the people are not fools,,,,,
Jan 8, 2013 4:07PM
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Ok.  Since when is retirement not optional?  Many of our own legislators are way over retirement age and many people work well past 65 years because they can't live on SS and they have not saved anything.
Jan 8, 2013 4:07PM
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There is a far simpler fix for Social Security.  Currently, people only pay on the first $112,000 of income.  For most of us, that's all our income, but high wage earners stop paying for the rest of the year at that point.  So, just remove the cap and have everybody pay on every dollar they earn!  That would remove any fear of Social Security running out of funds.
Jan 8, 2013 4:06PM
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I would like someone to explain to me how a fund that has a dollar go into it for every dollar that is removed from it can go broke - Oh yeah the government is stealing from it. I am not talking about the extra money going into Social Security to cover the Baby Boomers. That account will run out as it is supposed to right about the time most of the Baby Boomers have died. So - Hello Federal Elected officials quit stealing from the US Citizen.
Jan 8, 2013 4:05PM
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Since the late 1940's, any excess funds in SS that were not used for benefits were used to buy US Government Bonds, and SS always had excess funds until recently. So SS owns trillions in Governmet Bonds. While the Government has in fact spent all of the SS funds beginning with the Reagan Administration (Republican of course), feel a little better in knowing that it was trillions that we didn't borrow from the Chinese :).
Jan 8, 2013 4:04PM
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Slim674 pretty much nailed it !!!!
Jan 8, 2013 4:04PM
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Just another fact,,,   MISMANAGEMENT,,  That seems to be the norm for the present FEDERAL GOVERNMENT, along with STATE AND LOCAL GOVERNMENTS AS WELL!
Jan 8, 2013 4:04PM
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SS is running out of money.... surprise surprise; the government spends our money (people that pay into the system) like it is their own stock pile. Its not a game of monopoly, printing more doesn't make it ok to spend like it is endless. History repeats all the time guess they will spend us into a "do over".... that is when it is so broken beyond repair (no money) and we have to all suffer and learn to start over from scratch. Government abuse, waste and over spending is nothing new why does everyone act so shocked?
Jan 8, 2013 4:03PM
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How about doing away with the ceiling of $113,700 for contributing to SS.


Jan 8, 2013 4:03PM
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No what they should do is stop letting people draw social security who have never paid any in! These people who come here and work and then become American citizens just before retirement age and draw on everything they made in life whether they paid any or not. They dont want to do anything about the real problem. They want to punish the ones who actually paid social security.
Jan 8, 2013 4:02PM
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The Government has taken over $200,000.00 from me for Social Security over the past 50 years.
They have used that money without my consent, interest free, what would I have today towards my retirement had that money been left untouched and gaining interest for the past 50 years? Do you suppose that I might have more that $24,000.00 a year to live on, for the next 8-15 years of my life?

Jan 8, 2013 4:01PM
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It is time for all the social security money to go to the social security fund. With little going into the fund because of uncontested thievery by our national "leaders" there is no way for even the brightest of social scientists to accurately predict the social security demise. Stop Washington's greed and return the money.
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