Social Security -- the Facts

[JDPriestly]

About 160 million people contribute to Social Security through payroll taxes.
· About 53 million people receive monthly Social Security benefits, including:
o 34 million receive retirement benefits
o 4.3 million surviving spouses and parents
o 9 million disabled workers and their dependants
o 6.5 million children younger than 18 receive Social Security benefits
as dependants of deceased, disabled or retired workers.

Without Social Security, nearly half of Americans age 65 and older would live
in poverty.
· For two-thirds of the elderly, Social Security provides the majority of their
income. For one-third, it provides nearly all their income.

Benefits
A retired worker: $1,164
· A retired couple: $1,892
· Disabled worker: $1,064
· Disabled worker with spouse and child: $1,803
· Widow or widower: $1,123
· Young widow or widower with two children: $2,391

http://www.retiredamericans.org/system/storage/24/58/0/269/factsheet-social_security_2010__facts_and_figures.final.pdf

I think the cost of Social Security is about 62 billion per month or 705 billion per year. Please check my math. I'm not used to working with big numbers.

Per Wikipedia, the military budget is $533.8 billion. Add the "overseas contingency operations" and it is $663.8 billion.

http://en.wikipedia.org/wiki/Military_budget_of_the_United_States

It would be nice if some of us who are older could get jobs. The fact is that people in their 50s can't get jobs because of age discrimination. And those of us over 65 have slowed. Many of us probably could not keep up the pace that a lot of employers expect today.

Social Security is a huge cost, but there really is no realistic alternative that I can think of. Can you?

[napi21]

1. Check out this article from the LA Times.

http://www.latimes.com/news/columnists/la-columnist-mhiltzik,0,3041600.columnist

It's one of the best I've seen in recent years. Easy to understand and makes a lot of sense.

[Hannah Bell]

4. bears repeating:

The truth is that there are two separate tax programs at work here — the payroll tax and the income tax — and they affect Americans in different ways. The first pays for Social Security and the second for the rest of the federal budget.

Most Americans pay more payroll tax than income tax. Not until you pull in $200,000 or more, which puts you among roughly the top 5% of income-earners, are you likely to pay more in income tax than payroll tax...Since 1983, the money from all payroll taxpayers has been building up the Social Security surplus, swelling the trust fund. What's happened to the money? It's been borrowed by the federal government and spent on federal programs — housing, stimulus, war and a big income tax cut for the richest Americans, enacted under President George W. Bush in 2001.

In other words, money from the taxpayers at the lower end of the income scale has been spent to help out those at the higher end. That transfer — that loan, to characterize it accurately — is represented by the Treasury bonds held by the trust fund. The interest on those bonds, and the eventual redemption of the principal, should have to be paid for by income taxpayers, who reaped the direct benefits from borrowing the money.

So all the whining you hear about how redeeming the trust fund will require a tax hike we can't afford is simply the sound of wealthy taxpayers trying to skip out on a bill about to come due. The next time someone tells you the trust fund is full of worthless IOUs, try to guess what tax bracket he's in.

http://www.latimes.com/business/la-fi-hiltzik-20100808,0,1359956.column

[jtuck004]

6. "The next time someone tells you the trust fund is full of worthless IOUs, try to guess what tax

bracket he's in."

Or wants to make Social Security smaller, or wants to keep the Bush Tax Cuts, or wants to replace public schools with Charter Schools...

What great advice!!

Thank you.

[jtuck004]

2. It's not a cost, it's an investment in our people. Because they are worth something.

Thanks for the information!

[Hannah Bell]

3. one way or another, it's a cost that will be paid. the alternative is letting people live in the

streets & die in the gutter.

it's a transfer from today's workers with the promise they'll get the same deal. no one expects to be without many resources when they retire, but somehow that's how half the population winds up.

because that's how the rich make their profits.

[customerserviceguy]

5. Those numbers are about to change dramatically

The very first baby boomers, born in 1946, are about to become 65 in a bit more than four months from now. Many of those boomers from the years 1946-1949 have already started early retirement benefits because they have run through their unemployment compensation and cannot find jobs.

The peak of the baby boom was born in 1957. We're going to see many more people trying to collect Social Security than the 53 million you cite above by the time they hit full retirement age in 2023, a bit more than a dozen years away. The only reason the system has been able to function this long is because of that group, FICA taxes were raised dramatically in the late 1970's as this group started to get into the swing of its working years, and contribute so much that even Congress couldn't resist issuing IOUs for the extra money that should have been invested in something solid.

Now, the piper is coming to be paid...