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Academics warn that agency officials are using outdated calculations and have severely overestimated the money available for retirees.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And that outdated mode of forecasting, the professors note, has failed to take into account crucial factors about longevity -- especially the fact that Americans are living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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999Comments
Jan 8, 2013 3:00PM
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The Government has been stealing from SS since Johnson used it to cover his budget during the Vietnam War.  I say stealing because it has just been that, If they paid back all that has been stolen,

there wouldn't be a problem.  Greedy corrupt people have gotten away with stealing from "The People"

for too long.  Maybe it's time some accountability is forced on these overpaid worthless politicians.

Jan 8, 2013 2:59PM
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Of course, one of the "miscalculations" is to consider retirement at all. Yup, because employment for those over 65 is assured, as is their health and mental acuity. Retirement, which at least begins when one is no longer able to compete in the job market due to health and age is not optional, it comes to us all at some point. Otherwise, I have no problem putting the options suggested on the table for discussion. In short, the first of their two "miscalculations" merits serious discussion. The second is not a "miscalculation", it is a theory. In my opinion, its not a particularly well thought out one and certainly lacking in presentation here. 
Jan 8, 2013 2:59PM
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The solution is simple remove the cap from the max allowed in contributions to Social Security and also cap the max allowable for disbursement at retirement. That way contributions are received from all payroll regardless of the amount and the maximum amount disbursed should be based on the Country's average. How can anyone expect to have benefits based on 250k to 400k in salary. They already were sheltered from paying higher taxes in the last fiscal deal debate. When they go to retire the average salary is 43k, the max should be no more than 50 or 60k for calculations and that is the most they can get out in retirement funds. Anything over that has to be covered by themselves, the same as the ones that work and earn no more than the average salary will have to fend off with trying to survive on that allowance. But it is a right. We have paid into those programs for over 20 years and we should not be punished by cancelling the program after having taken our money or having our retirement age raised, unless we get back every red penny we contributed  to the program. Anything else would be immoral.
Jan 8, 2013 2:58PM
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ss is a gamble anyway,a foolish gamble and most people are tired of hearing its broke with no money,it sounds like a big scheme that can be revieled at any minute,clearly its a scheme designed where the most useless of us all benefits the most,If you dont believe that move to the south and go to work for a company that manages 350 government rent houses with 4,5,6,7,kids being the average with a worthless mother and father both collecting for nothing ailments,and the kids collecting for imaginary things bogus doctors say thats wrong with them so they can get in ss benefit money,dont say thats the exception,thats the rule
Jan 8, 2013 2:58PM
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When I first started working (1986), I was told that SS would be broke by the time I got to retirement, and the closer we get, the more likely it looks to be bust.  But, I have always worked with that in mind - that I would have to fund my own retirement.  So I make sure I put a decent amount in my 401K, and make sure I have enough to max out my employer's match on that.  My next step is to start maxing out the allowable amounts in IRAs and Roth IRAs.  I'll have to get out of debt first, but when I do, I think I will be able to get there.  Then, if SS is there, great, and if not, well, I never figured it would be anyway.
Jan 8, 2013 2:57PM
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Hope all you liberal a_holes that spent my our money saving for my retirement .. a mandatory retirement program .... have this all figured out in your little pea brains.  And now we are going to entrust our health to the same idiots in WDC ... geesh !
Jan 8, 2013 2:57PM
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one term in office and they get full retirement and medical for life........ I mean really where the hell is America's common sense!!!!! No other job in the country maybe the world provides those kind of benefits and we wonder why we are on a fiscal cliff.
Jan 8, 2013 2:56PM
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Here is another novel idea. LOWER the retirement age so people move out of the work force and younger people can find jobs. Then raise the rate of contribution to double what it is right now. Retire at 59 is about right. if you need to supplement your income, go get a job where all these younger workers are now vacating to replace the retired in the workforce. Oh.. that wouldn't work. You wouldn't die after your first SS payment and the government would have to pay money it doesn't have. Raising the retirement age will do nothing but move people to disability SS in their early 60's. And, disability SS pays more than regular SS, so where is the savings?
Jan 8, 2013 2:55PM
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The US government has turned Social Security into one of the biggest ponzi schemes in history. The American people have worked since the great depression and contributed to the SS fund. Their employers have matched the money for the most part. Many people have died before even collecting a dime of their money. This should create a surplus; right?
 
The Feds saw an government controlled agency that was running a huge surplus of cash and it drove the Feds crazy. So they started borrowing money for all their pet projects. They’ve about bankrupted the SS fund and now look at it’s recipients, “Oh, well, we’ll cut your monthly checks to save money.” The Feds have literally stolen our money and expect us to pay for it again while they award themselves raises, lifetime pensions and free medical.
 
Even this new Fiscal Cliff fix is full of spending that has NOTHING to do with Tax relief. The money the saved from taxing the wealthy was immediately diverted to new pet projects and we gain nothing!
 
How long are the American people going to put up with this corruption!
 
My two cents worth for what it's worth....I know; nothing
Jan 8, 2013 2:54PM
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Watch out! Those crazy bozo's are going to try and find ways to kill us off, but oh so innocently. "What's this? some new disese? What's that? ecoli did you say? Too bad all those people had to die, but now we have more for S.S."
Jan 8, 2013 2:54PM
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Just exactly who in any part of Government can be trusted?  Isn't that way too much money only to be constantly being lied to and cheated?

Something really smells in the good ol' USA....

Jan 8, 2013 2:53PM
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This world has gone crazy. Some one need's to wake up. They have been sleeping to dang long.
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S--t can the whole government and start over. Make a public audit of what's left in Fort Knox,if anything. Prosecute those responsible for anything missing. Make it so that no one making over 80,000 a year can hold office within the government. Let average Americans run the country since we are the majority  and put the ones in government positions now  on S.S. take away their ridicules pensions and let them see how most of America lives.
Jan 8, 2013 2:53PM
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The problem is not enough people paying into the system. 20 million people out of work not paying  in plus another 8-9 million getting ss disability. Look around and see all the fat people walking around with canes or riding scooters scaming the system. There are millions of people on SSI because they choose to abuse drugs and alcohol. One only has to watch the vulture lawyer commercials on tv luring them in.
Jan 8, 2013 2:52PM
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This article is complete BS. I guess they think we’re stupid. The truth is: The Federal Government has used our Social Security Funds for things other than Social Security. The Baby-Boomer generation of Americans has paid into the SocSec Trust Fund for 30-40 years and our employers have matched it too. Until 2012 this amounted to the tune of 12.4 percent of every paycheck. If these collections were saved and compounded at 5-6 percent, there would more than enough funds available.

 

Our money was, and continues to be, stolen from the Social Security Trust Fund. It’s the thievery and spending stupid!

Jan 8, 2013 2:52PM
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my whole family has passed, two grandfathers 2 grandmothers ,mother fathe,r brother,aunts and uncles and all have died before being able to draw ,all died in their 60's except my brother who was 37,shot by a gun ,but thats another story,all that money paid just goes into a kitty to keep worthless people living like a party,why money lost due to death cant be transfered to the remaining familys benefits instead of being wasted on worthless strangers?
Jan 8, 2013 2:51PM
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If they keep raising the Social Security age no one will have to worry about it, we'll all be dead.
Jan 8, 2013 2:51PM
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I can't help wondering what it looks like inside Obama's head. I can picture cobwebs, strange, eerie sounds and a lot of dark, empty space. You can holler in his ear and get an echo!

 

Obama's #1 comrade-ess, Nasty [bug-eye] Pelosi sez [and she is smiling] "We need MORE REVENUE!" Duh!! Hey Bugsy! Run that by me again! We don't have much left, after Obama's "Tax Cuts" for 97% of us. His math stinks. Wonder what his education level REALLY is? Nobody knows. Perhaps 4th, maybe 5th grade? Nah! They can do math. Well, at least some of them can. The ones in private schools, or those home-schooled.

 

These next 4 years are going to be REAL interesting!  

Jan 8, 2013 2:51PM
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This is the new American dream! No one comes out of this unscathed. All the public employees who thought they would work an excessive amount of overtime in their final work years to inflate their pensions will really feel the pain. The politicians who promised them their dreams of gold are no longer around or won't be and the ridiculously high pensions they were promised cannot be sustained.

Jan 8, 2013 2:51PM
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Refund the money to all ALL! and be done with it. Oh yes and include the interest. We will consider it a loan.
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