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Academics warn that agency officials are using outdated calculations and have severely overestimated the money available for retirees.
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And that outdated mode of forecasting, the professors note, has failed to take into account crucial factors about longevity -- especially the fact that Americans are living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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I believe that the two professors are mis-informed. There is no SS Trust Fund! That is why Obama keep telling old people that he cannot pay them when he is fighting congress for more money. As fast as the money comes in from working people, it goes out to old people and when these evil politicians created SS people were only living to between 50 and 55 years of age. That is why they set SS at 62 - they never intended to pay people their retirement. But God has played as joke on these fools - we are living until 80 and now they are forced to pay SS.
Also they need to mean-test the benefits. If you have over 1M dollars in asset, you should not receive SS and stop given money to people who do not pay into the system .
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.
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?
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A basic income policy can actually ensure a decent standard of living for everyone.
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[BRIEFING.COM] Market is plodding along with modest gains, underpinned by a steady performance from the financials (+0.4%) today and the continued interest in owning large-cap technology stocks.
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