At 77, Social Security confronts its own mortality

We have technologies to help us celebrate the program, but we still have to reinvent the way we think about aging.

By The Fiscal Times Aug 20, 2012 1:37PM
By Michael HodinThe Fiscal Times

How odd it is that we have technologies in this current century to help us celebrate the policies of Social Security (which turns 77 next week) and Medicare (which just turned 47), both formed in an earlier century. We have birthday cakes on Facebook pages and tweets from all quarters about both of these entitlement institutions.

And how interesting it is, too, that topics normally left to policy wonks inside the Beltway or among academics from Cambridge to Palo Alto have made their way into social media. Or that we are now being invited to take to the streets by the Alliance for Retired Americans in their summer campaign with the slogan, "Let’s Not Be the Last Generation to Retire." The group's goal seems to be to amass signatures on a petition calling for America to keep Social Security and Medicare far into the future. Not exactly the inspiration of the good old American work ethic and our understanding of virtue. And not anywhere in the vicinity of our current demographic realities which, as we live well into our 80s, hardly square with outdated ideas of retirement.

Yet the same crowd that so easily adopts this century’s newest communications technology is hopelessly stuck on ideas and institutions that were invented in – and for – an earlier time. And they are not alone, as was so clearly revealed in the groundbreaking AEGON Retirement Readiness Survey, which questioned 9,000 people across eight European countries and the U.S. who believe they’re worse off today and fear they will not be able to retire in 20th century style.

As we dramatically reduce birthrates across the globe, where there will soon be more of us over age 60 than under 14, it is the reverse that must begin to animate our thinking: What does a working life look like in the 21st century when there are two decades beyond 20th century traditional retirement age?

The campaign for retirement is not only peculiar in light of our longevity – how many people really want to play golf or garden for twenty years or more? Living for decades without an active income is also fiscally unsustainable in light of the dramatic demographic shift of what would be "working to retirement."

Sure, the Social Security and Medicare programs worked when they were invented. But even the vaunted UK National Health Scheme on which U.S. Medicare was modeled is unable to meet the demands of an aging population. And that’s against basic reforms year after year, including a change to the once-uncontested principle that you were either "in" or "out." Today, if you don’t like the health care you’re getting and can afford something on the outside, it’s OK.

In the hotly contested presidential campaign, there’s been barely a word from either of the candidates about these entitlement celebrations. Only in newly minted socialist France does there seem to be any public display of keeping 20th century retirement, but the confiscatory taxes that follow underscore the disconnect. Surely the demographic realities of our 21st century demand something more than retread 20th century policies.

Some may not want us to be the "last generation to retire," but the generations of the 21st century know they must reimagine and reinvent how they will live in their century.

Michael Hodin is a contributor at The Fiscal Times. Subscribe to The Fiscal Times' free newsletter.

More from The Fiscal Times
Aug 20, 2012 4:58PM

Remember that social security is an addition to some other income that you created during those active years of your life.  During those years we paid a social security tax as did our employers on our behalf, and at age of 62 we all should be able to collect some reduced benefit which supplements any other income,  and which we count on to make our golden years better.


You know, many paid into it for four or five decades, they actually have a fortune being taken care of by the USA government.  If the president, senators, and representatives have believed that the SS fund is there to be raided every four years, that is their problem.  It is time for them to pawn their property, to forgo their salaries, and to sell their fat behind because the SS fund IS NOT AN ENTITLEMENT, it is our money and we want it back!!!

First , the average life span of Americans is 77, not in the 80's.  Men  on average live to be about 75 and women about 81.  We've made changes in the past, raising the contributions of both employers and employees from 2.4% to 6.2% each, and we've raised the amount subject to social security taxes from as little as $4,0000 to the current $106,000 in earnings.  Actually, we don't even need to raise the %age rates to keep social security solvent.  We simply need to raise the amount subject to social security taxes from $106,000 to $1,000,000.  The millionaires won't go broke.
Aug 20, 2012 5:25PM

When I started working in the 50's nothing but SS was offered and I paid into it all of my working life. Did not get into a company pension till in the 70's and that did not even match what I paid in UNION DUES to work for that company.

 Did not get into a good retirement plan with a 401K till I moved to NC and got employed in 1993 with a GREAT COMPANY, everything was going fine and really built up a retirement chest, than came 9/11 and lost part of my 401K, than the GOV. signed the free trade acts and my JOB WENT TO CHINA, there went my chances of a good retirement.

Luckily my company pension was protected and has been a great help in my retirement.

 I believe the GOVERNMENT does not want the BLUE COLLAR or MIDDLE CLASS WORKERS to be financially stable in retirement, I believe they want us to keep working till we DIE to support there life lifestyle's and provide for the ones that don't want to work and contribute to society.

Aug 20, 2012 3:02PM
How can we justify billions of dollars in foreign aide but also ask our citizens to expect to work longer, get less, and pay more? We should not fund anything outside our borders until ALL of our citizens get what they have paid and worked for. Also, send congress a message - if they can't deliver a balanced budget than they are not eligable to run for re-election as they have not performed their job adequately.
Aug 20, 2012 5:36PM
I have paid into the system for 40 years as required by law; now I expect to be paid it back; that, or the government can pay it all back to me with compound interest.
Aug 20, 2012 4:55PM
I do not consider Social Security and Medicare as entitlements.  I have had to pay into those institutions for my entire adult working life.  Some years as a self employed person I had to pay both the employers and employees share. If I could have been investing that money somewhere else, I would have something to retire on.  Additionally, when Congress could not legally touch that money there was never a problem with the system. But once they figured out a way to spend it, then the money and its earnings realy went out the door.  Now they want to tells us it is an entitlement.
Aug 20, 2012 5:17PM
Social Security and Medicare should be a program for only the people who works and pays to the program.  Unfortunately, many people receive it as welfare and "welfare" is an "style of living" now that is passed from generations to generations.
What is happening with our new American Citizens who has never worked but when they get 65 years old they start receiving benefits?

Aug 20, 2012 3:26PM
The author refers to SS in the first paragraph as an "entitlement institution." Dear Mr. Holdin; while it may be an entitlement for some, it's not for most of us who have paid into SS.  In turn, I want MY money back. No entitlement here.
Aug 20, 2012 4:34PM
I work in law and used to do Social Security disabilty work.  I've seen so many fakers, it makes my head spin, while truly disabled people have to wait about two years to collect.  I have seen teenage junkies collect disability, as well as little kids with ADHD.  THEY ARE NOT BREADWINNERS, so why are they getting Social Security.  I know a young former bank manager collecting disability due to anxiety (?) and her pre-adolescent kid is also collecting due to ADHA.  While they have these two government checks coming in, the husband/father earns a great income.  What a racket!  I go to work each day with horrible arthritis, a blood disorder and a lung disorder and have a long walk to get there If I can get out there and manage to put one foot in front of the other at age 63, these young people that I know can darn well get out and work.  What I saw in law was frightening - foreigners with terrible diseases coming here and signing up.  My sister worked for the government and said airplanes would fly here from Russia and bring people here who never paid in, while a lawyer was on board signing them all up for Social Security disability.  This is sickening and disgusting.
Aug 20, 2012 3:23PM

As Johhny2001 stated "PLEASE, PLEASE STOP CALLING SOCIAL SECURITY AN ENTITLEMENT. IT IS NOT. WE PAID IN ALL OUR LIVES FOR IT." Personally I have paid in $134,283.61 to S.S. and also $28,299 to Medicare since they itemized it on my pay stub in 1991. I have paid less into my 401K and it's worth almost triple my contribution, if the Government would quit dipping into it it would easily be fully funded with wise investing of the monies paid in by those of us contributing.

Aug 20, 2012 3:44PM
What we have here is a failure to communicate. I paid into SS for 45 years and yes I planned on it for part of my retirement, along with a union pension. Now they say the system is in trouble because of the leaches in Washington. Close down SS benefits and this country will TRULY be in serious trouble. There will be an uprising of which Washington never would have invisioned. The people of this country are tired of all the **** and unkept promises that these so called politician make. It is time to down size government not the paid for benefits of its people. 
Aug 20, 2012 2:58PM
Leave SS and Medicare alone......quit borrowing money from it for other crap!!
Aug 20, 2012 3:11PM

Were we just giving the government our money then, in addition to the taxes we are required to pay. I personally have contributed to SS for 22 years. If the government can't sustain SS then will we have all of our money returned? I would say not. Our government needs a complete overhaul. Kick all of the politians out of Washington and start over with limited terms for Congressman. And no pension plan! I bet they will still receive their pensions when we are being screwed out of SS.

Aug 20, 2012 4:31PM
Another thing to remember is the biggest reason SS is failing - all the money that has been taken out and used for other things, starting with LBJ.  THAT is why there is no money left for the Baby Boomers.  Do some research.
Aug 20, 2012 8:59PM

First, social security is designed to be a supplement to a defined benefit plan (think pension, an endangered species) or a defined contribution plan (think 401(k) - the key word being contribution - your contribution).  Social security is not meant to fund retirement in its entirety.  If you are thinking on relying on social security for the bulk of your retirement you are in for a rude awakening. If you have time to change course, do so and do so now.  And for goodness sakes, don't bank on being able to work into your seventies as a 'retirement plan'. If you think working now is difficult, imagine doing the same in your 60s and 70s - not a pretty picture, is it? Take some measure of control - don't risk your entire future on the decisions of filthy politicians - you and you alone have your best interests at heart. You will thank yourself later....


Now, for the system....


Let the threshold be raised a touch to help shore up the SS fund in the short term.  For the long term, however, we are expected to be able to handle our individual financials in a realistic manner - we should expect, rather, DEMAND, our sloth-like behemoth of a government do the same. Really???? Yes, really.


Government should be downsized - government should govern - a democracy is not designed to grow to such a size that it becomes able to care and provide for all.  The more it provides the more it takes - moving evermore away from the definition and purpose of a democracy.

Foreign aid should be downsized - where in society do you see an individual borrow funds to be able to give to charitable organizations?

Someone has got to look into the health plans enjoyed by our elected - the elected ought to be subjected to the insane system the private sector is subjected to. Really - who can argue with that?

We need to stop functioning as the world's police department.  Help, sure, shoulder the majority, no.

...and on and on

Looking at a few of these expenses and lowering them (similar to an individual reviewing their budget but on a much larger scale) might serve to protect our seniors from being raped and our youth from being robbed blind.


Lastly - vote.  Vote enough reasonable and practical individuals in (party aside) good change can happen.  Chip away, little by little.


Happy birthday, social security - here's to many many more healthy years.

Aug 20, 2012 5:05PM
I think this article was written by a younger person like myself.  If you are reaching retirement age and paid in all your life expecting to be able to retire, this article would make you mad.  I think this guy is in his thirties and still hopefully with time to prepare.  The tone is very insensitive and uncaring. I suppose his parents are still working and not wanting to retire quite yet.
Aug 20, 2012 6:07PM

Social security is not an entitlement, it is full funded and the system has worked better than any (overcharging for management fees) private ran insurance- partial retirement account. If Americans would just grow some balls and put a stop to the overpaying of our below average CEOs and a health care system that is much more concerned with huge profits than patient care we wouldnt be reading this article about the mortality of social security.The Author of this article above, should cantact his old college Alma Mater and ask for his money back as he obviously has learned nothing about journalism. He is just spewing garbage thought up in some corporate funded think tank.

Aug 20, 2012 4:38PM
if you never pay in you should never get anything out social security or medicare we give to people who never put into the system ged rid of them part of problem fixed
Aug 20, 2012 8:42PM

The government is now referring to our Social Security checks as a “Federal Benefit Payment.” This isn’t a benefit – its earned income!

Not only did we all contribute to Social Security but our employers did too! It totaled 15% of our income before taxes. If you averaged $30K per year over your working life, that's close to $180,000 invested in Social Security.

If you calculate the future value of your monthly investment in social security ($375/month, including both your and your employer’s contributions) at a meager 1% interest rate compounded monthly, after 40 years of working you'd have more than $1.3+ million dollars saved! This is your personal investment.

Upon retirement, if you took out only 3% per year, you'd receive $39,318 per year, or $3,277 per month.

That’s almost three times more than today’s average Social Security benefit of $1,230 per month, according to the Social Security Administration (Google it - it’s a fact). And your retirement fund would last more than 33 years (until you're 98 if you retire at age 65)!

I can only imagine how much better most average-income people could live in retirement if our government had just invested our money in low-risk interest-earning accounts.

Instead, the folks in Washington pulled off a bigger Ponzi scheme than Bernie Madoff ever did. They took our money and used it elsewhere. They “forgot” that it was OUR money they were taking. They didn’t have a referendum to ask us if we wanted to lend the money to them. And they didn’t pay interest on the debt they assumed. And recently, they’ve told us
that the money won’t support us for very much longer. But is it our fault they misused our investments?

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