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Academics warn that agency officials are using outdated calculations and have severely overestimated the money available for retirees.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And that outdated mode of forecasting, the professors note, has failed to take into account crucial factors about longevity -- especially the fact that Americans are living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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Social security was set up to be a self sustaining program that was set up to allow for a minimum amount of retirement for people. It has since been turned into a poor tax throughout the years following it became a way to increase revenue. At this time there are many viable options the two I favor go like this.
Option 1: The government pays back what they owe and social security continues and is never used as an extra source of funding.
Option 2: The government pays back what they owe and people are allowed to collect there benefits when they are to be paid up to the amount that they are owed matched against what they paid in and social security is cut.
If social security were cut I'd hope people would see a rise of around 2-3% in their pay as the company wouldn't incur their 6.2% portion either but that will probably not be the case.
RAISE THE AGE!! 70 is plenty early. Get a life and off the idea of "drawing" money at the age of 62-69....... 70 is it!!! Back to work!
what a couple of idiots, the government has been collecting SS from people to the tune of billions and have squandered it. Now these two guys say in order to save it we have to cut benefits, increase the age of retirement, limit cost of living increases.
The simple solution is to draw a line in the sand and state that you will no longer have SS, starting with whomever turns 18 in 2011. Then yes you will have to put money aside for the countless millions who have been supporting the system hoping for a return on their investment.
Seems like the right thing to do
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".
Give me a break I retired after way too many years working at a job when I was expected to perform physically as well as a 25 year old. Got points off when I could no longer lift 50 pounds from a stack 18 inches over my head and put it back. Not every one has a job where they can keep working till they drop dead. I wanted to spend time traveling, something you cannot do in most jobs. If the let you take 5 dyas in a row off you are very lucky. Too many jobs today will fire you if you get an age related illness or injury due to failing joints. Most employers want you out by the time you hit 50. You want social interaction work is not the place for it, church, hobby clubs, craft groups, health/fitness and family should provide plenty of interaction.
They will say & do anything to get their grubby lil hands on our earned credit plan! They have a way to fund SS for another 75 years it involves the rich giving & taking (regarding their fair share) in relation to taxation & the fact that they don't use it anyway!
But the fact that they like to call it an ENTITLEMENT PROGRAM, I say un-entitle yourselves & give me back my money with interest (as it that would apply if I owed the government) & worry no more about me or my paid credits & those who think allowing these bas****o's who gave us such hits as DERIVITIES, SUBPRIME PREDATORY MORTGAGES & the heddge fund/money market Madoff's of the world if you think they have our best interest at heart I would try to sell you that bridge in New York, but I think it's gone! As or 401K's & pensions - they just become another private industry THANKS TO OUR REPRESENTATIVESECOMING HARLOTS OF BUSINESS!
I think it is because so many are approved for disability social security - those people pay no federal taxes at all. I know so many who get disability that are no more disabled then I am. There is so much abuse.
how about if you nevere paid in you can not ever get anything out
stop the free loaders and abusers of the system
people on diswability for any reason that never pay in is wrong
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[BRIEFING.COM] The stock market finished an upbeat week on a mixed note. The S&P 500 added just over a point, holding its weekly gain at 1.0% while the Nasdaq lost 0.4%.
The major averages began the day on an upbeat note, but relinquished their opening gains during the first 90 minutes of action. The early sentiment was boosted by a better-than-expected nonfarm payrolls report for February (175K versus Briefing.com consensus 163K), but a closer look into the report suggested that ... More
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The solid report comes a month after the retailer closed all of its Canadian operations.
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