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Academics warn that agency officials are using outdated calculations and have severely overestimated the money available for retirees.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And that outdated mode of forecasting, the professors note, has failed to take into account crucial factors about longevity -- especially the fact that Americans are living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."
More on Money Now
- Self-driving cars roll into CES
- College football wins more fans and ad dollars
- Sushi mania: 489-pound tuna sells for $1.76M
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.
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?
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.
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?
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.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
[BRIEFING.COM] S&P futures vs fair value: -9.10. Nasdaq futures vs fair value: -19.50. U.S. equity futures trade sharply lower amid cautions action overseas. The S&P 500 futures trade nine points below fair value with some volatility expected around 8:30 ET when the Nonfarm Payrolls report crosses the wires. The Briefing.com consensus expects the report to reveal the addition of 220,000 payrolls in July.
Reviewing overnight developments:
- Asian markets ended on a ... More
More Market News
Investors are anxious to see if hiring can maintain its strong pace in the second half of the year.
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'