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Academics warn that agency officials are using outdated calculations and have severely overestimated the money available for retirees.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And that outdated mode of forecasting, the professors note, has failed to take into account crucial factors about longevity -- especially the fact that Americans are living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."


More on Money Now


999Comments
Jan 8, 2013 3:35PM
avatar
someone wrote if you didn't pay in...citing disability situations, etc. you didn't pay/don't play.  It got me thinking.

What if you married and your spouse never worked?  Many wives that never have worked collect on their husbands S/S. Want to start a national hissy-fit,  float the idea of dropping that freebie.  After all, a married person pays no more into S/S than an unmarried one!  

So, I  propose:  want your SPOUSE covered ?  You opt for paying into the "FAMILY PLAN".  Want your underage KIDS to collect if you die?  That's the "FAMILY PLUS PLAN".  You wouldn't HAVE to opt for the extended benefit (s), but you could.  Isn't that how INSURANCE policies work?


Jan 8, 2013 3:35PM
avatar
Stop the double dipping.  If you receive a government paid pension you should not be eligible for SS.  Sorry you spent the money and you should take the IOU.
Jan 8, 2013 3:34PM
avatar
Politicians can refer to social security as an "entitlement" program as soon as they refund to me all the $ I have paid into it, plus a conservative 5% interest. There would be so much $ for everyone if the government hadn't "borrowed" from it. The biggest ponzi scheme ever!
Jan 8, 2013 3:34PM
avatar
69 or 70?  Most people start dying at that age - good health history or not.  Retiring at that age for what?  To buy a walker to get around the assisted living home?  Just because we're living longer it doesn't mean the quality of life is still the same as when we were young.  We need to free up those jobs for our youth.
Jan 8, 2013 3:34PM
avatar
There's not going to be any social security for those of us in our 40's. We are paying into a system that robs from the workers to pay benefits that we will never see. Now that the SS Tax has doubled as well as the federal and state taxes workers paychecks are now smaller than ever. So much for no new taxes for those making less than $50,000 a year. Oh and those "new" taxes on the rich, they're not going to have to pay them since most rich people keep their money in tax exempt foundations. the rest will have plenty of deductions to ensure they get a tax refund. How many time have we heard about multi-billion dollar corporations getting multi-million dollar tax refunds. And we wonder why the government is broke.
Jan 8, 2013 3:33PM
avatar
There are several options to regain the solvency of SS, most of which have been discussed:

1.  Government workers should have to pay SS taxes just like the rest of America (isn't this a democracy?).
2.  Demand, without exception, that the government pay back the billions it has borrowed from the SS fund over many years.  If we take out a loan, aren't we obligated to pay it back?  Somehow, they have to be made accountable and to pay back the money they "stole".
3.  Do not allow millionaires and billionaires to draw from SS.  Talk about waste!!  Why do they need it?  Is it greed?  Of course it is!!
4.  Non-citizens should not be given the privilege of collecting SS.  AMERICAN CITIZENS SHOULD COME FIRST!!!
5.  Children should not be allowed to collect SS.
6.  When low-income seniors and truly disabled AMERICAN citizens collect SS, it's absolutely ENTITLEMENT!!

We MUST make sure ALL Americans are made aware of what the government has done with our SS dollars!!!  It should be the headline in every newspaper in this country, in huge letters.  The American public has to DEMAND that the government pay back to SS what they owe.

I absolutely disagree that social security beneficiaries should not get any cost of living raises!!  A huge majority of these people (who, by the way, paid into SS during their working careers) are low-income, have more medical expenses, etc., than working Americans.  Expenses are continually increasing across the board, year after year.  Do the math people!!! 

The selfish, wealthy people in this country have to step up to the plate and realize they are well off enough to forego SS payments.  Also, they have to stop the nonsense of continually cutting benefits from the poor, disabled and seniors, while they do whatever it takes to hold on to every dime of their bloated and supercilious wealth!!

Jan 8, 2013 3:33PM
avatar
Reduce a persons lifespan, that will be the job of Obama care, when you turn 76 there will be no more surgery or lifesaving methods taken, unless pills will work.  The ethics panels will make sure of that.  We worked all our lives to look forward to retirement, and to have these two turds tell me i'm not happy, is way to funny. 
Jan 8, 2013 3:30PM
avatar

There's no reason any American should have to work till they are 69 or 70 years old. They need to clean up the waste and fraud and stop giving aid to these dam worthless countries that don't like us anyways! They give away billions that could be put to better use here at home!

 

avatar

911 was orchestrated by our government to bring forth Homeland Security.  Obamacare was spawned to mitigate the SS problem by killing off the old people in the near future.  Now that the government can regulate healthcare they can regulate lifespan; you can’t collect SS if you’re dead.  Remember when Sarah Palin first mentioned death panels and the Democrats were all up-in-arms and nervously laughed that away in an attempt to discredit her, it was because she hit a nerve, a sore spot of truth that they didn’t like.  She was right!

In the next ten years any babyboomers unfortunate enough to be on Obamacare will be dropping like flies. 

Jan 8, 2013 3:30PM
avatar
NOW WE WORK TO SEVENTY IF YOU LIVE THAT LONG TO RETIRE BUT CONGRESS AND THE SENATE DON'T DO **** ARE OVER PAID AND RETIRE TO WHAT THEY WERE MAKING SOUNDS FAIR TO ME. AND THERE PENSION IS OUR TAX MONEY.
Jan 8, 2013 3:30PM
avatar
40 and fifty years of paying in and when they die before being able to collect ,SS sends the family 210.00 dollars death benefits,what an insult
Jan 8, 2013 3:29PM
avatar
Since Federal Retirees didn't pay into SS, they ARE NOT entitled to benefits. To my knowledge, the same is true of State Retirees - Therefore, We're NOT part of the problem ! The problem is & has ALWAYS been SS is a Government sponsered Ponzi scheme ! Once the "baby boom" ended, the program was doomed to fail. Also SS was NEVER intended to be a soul source of retirement funding; individuals were anticipated to save also.
Jan 8, 2013 3:29PM
avatar

Those that make statements like that, have no Idea, what it has been to work 50 years every day,

trust me I am more than ready to retire. I have no desire to continue to get up at 5 am 5 days a week, work for 9 hours then go home and crash. after 50 years it is time for me to have me time.

This whole SSI and Medicare financial problem can be fixed simply by removing the income limit.. right now if you make more than 108,000 you stop paying ssi and fdic taxes at 108,001, just remove that upper limit. let everyone pay ssi and fdic on their full earnings.. 90% of us make less than 108,000 anyway and we do pay ssi and fdic on 100% of our earnings. only the upper 10% do not..  so who are we protecting..???? such an easy painless fix, wonder why no one else in washington has come up with that Idea..???? 

Jan 8, 2013 3:29PM
avatar

In my lifetime, Social Security has been raided by Congress for cash so often that I've lost count. SS must stand alone and be left alone--hands-off!

 

We've worked our entire lives for this program, and it is a fair and workable program. Perhaps the most workable program in gov't history.

 

People living longer and healthier is not an excuse, but is a lie. Look again at all stats on that subject.

Jan 8, 2013 3:29PM
avatar
Bunch of c*ap......Just pay back all the trust fund "borrowing" that has been going on for 30 years.  The article/research is slanted by a couple of Ivy league profs pulling in a couple of hundred grand a year to  get to a preconceived outcome and part of a carefully orchestrated wave of social security demise articles by the left and the right wing media. Raising the retirement age to take into account current demographics is appropriate and taxing those nice capital gains the wall streeters love so much via FICA  (exempting retirement accounts) also makes sense.  This is just the first wave of the attacks on seniors that the dems will wail about and then vote for so they can "invest" more in dysfunctional government programs that are exempt from such scrutiny.  Most info we get these days is tinged right or left but it is all propaganda. Goebbels would be proud of what the US has become.
Jan 8, 2013 3:28PM
avatar

It used to be very difficult to get on disability. Now you just have to hire the right scum lawyer.

 

The same thing has happened to all the safety net programs. Once they were sane and limited now they are insane. The US Federal Government is creating the zoombies.

Jan 8, 2013 3:28PM
avatar
A lot of liberals who voted for Obama are complaining that they have to pay the 2% increase in social security. What they forget is that it was a temporary decrease, a holiday, and now it has expired. I say quit whining. You voted for the guy, so you can't complain when he does what he says he is going to do. I notice this debate is not on MSMBC. They like protecting their buddy.
Jan 8, 2013 3:28PM
avatar
There asking the American public if they can barrow (really taking it)  money(aka Social Security) & now they want you to pay back the loan threw Taxes. What a plan where can I barrow money this way
Jan 8, 2013 3:27PM
avatar
These two morons are full of crap.............
Jan 8, 2013 3:27PM
avatar
Once AIG IS DONE SUEING US TAX PAYERS for bailing them out we will be a bankrupt nation anyway. Wallshington will never operate like intended without ..  TERM LIMITS..
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

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.

Trending NOW

What’s this?

MARKET UPDATE

[BRIEFING.COM] The stock market finished the Wednesday session on a modestly lower note, but it is worth mentioning today's retreat took place after six consecutive gains. The Dow Jones Industrial Average (-0.1%) and S&P 500 (-0.2%) settled not far below their flat lines, while the Nasdaq Composite (-0.8%) lagged throughout the session.

Equity indices started the day in the red, with the Nasdaq showing early weakness as large cap tech names and biotechnology weighed. The technology ... More

MSN MONEY'S