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Academics warn that agency officials are using outdated calculations and have severely overestimated the money available for retirees.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And that outdated mode of forecasting, the professors note, has failed to take into account crucial factors about longevity -- especially the fact that Americans are living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
Jan 8, 2013 2:40PM
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This is another lie the Government wants the people to believe so they can take more money out of our pockets!!!!!
Jan 8, 2013 2:40PM
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What should change is the pension and health benefits plan provided to our legislators.  Put them into SS and the national Health plan and see how quickly SS gets fixed.  And the gov't SHOULD PAY BACK what it borrowed from SS years ago WITH INTEREST.  If you failed to pay your income taxes, the gov't would eventually incarcerate you.

 

 

Jan 8, 2013 2:40PM
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I have a better chance of getting benefits on URANUS than in USA on EARTH!
Jan 8, 2013 2:39PM
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How could it be worse, SS is, afterall, a Ponzi scheme that puts Bernie Madoff to shame. LBJ and Jimmy Carter saw to that years ago.
Jan 8, 2013 2:39PM
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CONGRESS/PRESIDENTS should be subject to the laws of the land like everyone else.  they keep exemempting themselves froM ANYTHING They want? They were elected to work for YOU? Are they? I agree with the post; Pay SS Tax on ALL income! How about it CONGRESS?

Jan 8, 2013 2:39PM
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As a Millenial (yes the hated generation), I am certain that Social Security as we know it will not exist by the time I reach the age of 65 or 70.  I think reforming retirement and Social Security is a necessary step that Washington is unwilling to make.  There is no room in Congress to think outside the box and come up with an idea that may benefit the new workforce.  I don't understand why I can't opt out of Social Security altogether in order to use the money to invest how I see fit.  I know Social Security should exist in some form for those who become disabled or who cannot provide for themselves in the long run, but they can take a small portion out of my paycheck (say 2%) that would fund the new Social Security for those less fortunate.  The remaining 4% that we pay into the system can then be given back for individual retirement investment (401k, IRA, Roth IRA, Crowdfunding).  Employers can also cut back to 2% in the general fund with the remaining 4% being pushed back to the employee as a match towards individual retirement.  I'm just tired of dumping money into a fund that will be eventually insolvent.
Jan 8, 2013 2:39PM
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someone fuekeme???   they will  ...when i turn 65 and no one will give me a check
Jan 8, 2013 2:38PM
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One way to add longevity to Social Security is to force the federal government to pay back with interest and penalties all money it has borrowed from Social Security in the past 50 years. If that is done, the national debt will come close to being double what it is now, but Social Security will be saved for many more years.
Jan 8, 2013 2:38PM
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The Government should stop foreign aid and put all that money into social security. If done, Social Security would be secure forever.
Jan 8, 2013 2:37PM
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They also need to take into consideration, all the people who arent of reitrement age receiving SSI. 6.5 million children receive SSI now. Some for parents that passed, but the majority are for disabilities, which now include ADD ADHD Austism Aspergers disease etc. Teachers are complaining that parents are begging for referrals for ADD so they can claim disability for their children.

I thought SSI was to supplement an income that was loss? At what point did we expect our children to pay our bills? Not even the best pyramid scheme could keep this up.

Jan 8, 2013 2:37PM
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Why do the Republicans want to make life more difficult for Americans by making Social Security worse. Social Security is a benefit to everyone. Let's try to make changes that make living in the United States better, not more difficult. Taxes in some cases are worthwhile, if it takes a slight increase in the SS tax - do it, we'll all be better off for it eventually. Those opposed to an increase in SS taxes say it  will slow the economy. That's because we have a consumer economy which is the real problem. Work on bringing manufacturing back to the United States.

 

I just bought a package of Del Monte diced pears and I live in the midwest. I looked at the label and it said product of China. Whoda thunk it?

Jan 8, 2013 2:36PM
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I want to retire!!!

Take the money from the polititians now. All - past & present.

No retirement for them, they are all wealthy anyway.

No lifelong health benefits, let them Obamacare!

Cut their salaries and limit terms.

Serving the people should be an honor, not a lifelong career of screwing the taxpayers.

Jan 8, 2013 2:34PM
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HELLO! IS ANYBODY OUT THERE?  The problem is MILLIONS of people that didn't pay a dime, FAT people drawing SS Disability because they are unemployable,  And then there is the Billions ?? the government has been stealing since Lyndon Johnson.  Get the deadbeats and people that didn't pay off the rolls, and put back the stolen money.  WE'LL BE FINE.  Better yet, privatize it like Chile did so the gov't can't double dip in your pocket.
Jan 8, 2013 2:33PM
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what are they saying about less smokersand cardiovascular disease people are living longer what they want for people to die at 65 so thy dont have to payout ss they are al a bunch of liers we should get them all out of ther if it wasnt for the blue collar worker this country would have been dead a long time ago  just raise everyone ss tax by 1 % but stop them **** in the house from taking it and using it elsewere
Jan 8, 2013 2:31PM
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Its never going to change Until We the people of  United States pull together as a Team & Change 
  It and put a stop to the borrowing of the moneys they will never repay what was taken . It has always been how can we get more more money out of the Tax Payers . They just can not stick to a Very Tight Budget Like the Rest Of the American Tax Payers Have To.   
Jan 8, 2013 2:31PM
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i'm 64 retired due to being laid off. i would love to work. but thanks to the govts. failed programs like nafta, gat, cafta that sent all the jobs packing, there are few if any employers that will hire me. what's a person to do? it's easy to tell us to continue to work, but due to their dereliction of duty to the american citizen, there are no jobs left.
Jan 8, 2013 2:30PM
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I paid 7% into retirement for 37 years as a government employee, but not into social security.   I receive a government pension, but no social security.   Govt employees who also paid into social security through another job, etc., and receive a government pension only receive half of their social security entitlement.
Jan 8, 2013 2:29PM
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This is a very simple fix... MAKE IT A TRUST FUND!.. A real one.. Invest the principal and then divide and pay out the earnings and don't touch the principal.. Isn't that the most conservative way to run a retirement fund??
Jan 8, 2013 2:27PM
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Issue on-demand refunds for all those who have paid in. Check please!
Jan 8, 2013 2:25PM
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Simple but no one talks about it. Remove the cap for payment into ss. who does it benefit ? the wealthy ooh.
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