celtic_crippler said:
In the most simplest of terms...
With the "Baby Boomers" approaching retirement, there will be more people drawing off of SSI than putting into it. Basic math dictates this process can not fund itself in this manner. Will there be legislation to address or plan for the problem? Who knows...if there is I'm sure it will be inadequete. But that just my humble opinion based on what I've see from partisan politics.
I wouldn't rely on the Fed's for my retirment. I would instead at the very least invest in a 401K or an IRA of some sort and consider any SSI I may receive as gravy.
Investing in a 401(k) or an IRA is a very good idea.
The Social Security system was never meant to be the entire source of retirement funds. It was designed to be one third of the program. Defined Contribution programs ... pensions ... were a major part of the plan; As were personal savings.
What has happened to Defined Contribution Plans in the last 30 years? Ask any lifelong employee of United Airlines or Bethlehem Steel.
That's OK, about the time companies wanted to stop contributing to Defined Contribution Plans, they managed to get congress to create the 401(k) plans ... pushing the idea (and funding) on to the individual. (I'm wondering, did salaries go up because of this shift in burden?) Great! Unless, you're 401(k) is at Enron ... how did that work out for them?
And, let's talk personal savings ... what is the current savings rate for America ? ? ? Guesses, anyone .... Can you imagine it is
less than zero? Yep, Americans are saving less than zero percent of their income. Instead, going into debt with Home Equity Credit lines and Second Mortgages.
So, let us review the 'basic math'.
Currently, there is ample cash on the Social Security books to cover payouts for the next 30 years or so (actually, not cash, but United States Treasury Bills). At some point in the future, paying outs will exceed incoming revenue. At which time, the current IOU's from the Treasury will cover the difference. Eventually, the IOU's will not be enough to cover the benefits ... but remember, there will still be incoming revenue to the system ... So, if we wait, we will have two choices; a) borrow the difference or b) reduce the benefit.
Currently, we are borrowing like a 'drunken sailor' to fund the day-to-day activities of our government (hell, the government is borrowing FROM social security). Why would we not be able to do the same (borrow) for Social Security in, say 30 or 40 years?
Or, we could indeed, reduce the amount of monies paid out. So, instead of paying out $1,000.00 per month, we pay out $750.00 per month. Yes, that would be painful, but, it is not the disaster scenario some paint.
A third option would be to act now. By making some changes now, we could reduce the impact of future changes. We may not be able to eliminate them, but reduce the rate of decline (isn't that what the President was praising himself for the other day ... reducing the rate of growth for non-security discretionary funding each year of his presidency?)
What might that third option be ... a) raise the age when funds can begin to be withdrawn b) increase the withholding amount c) eliminate the withholding cap of $94,200.00 (everything after that is not subject to withholding).
(As an aside ... it is awfully nice, round about October (or earlier if you're really well paid), when your paycheck reaches that $90,000.00 threshold for FICA (2005 threshhold) .... they stop withholding 6.2 % from your paycheck ... it's like getting a raise for the last few months of the year. Woo-Hoo).
So, yes, basic math does tell us the program has some challenges. But thoughtful examination (as opposed to partisan rhetoric) shows us this is not the equivelent of a six-mile-wide asteroid headed for Planet Earth.
artyon: :rofl:
