📋 How Social Security and Medicare Reshaped America (AARP Article)

[SpringIsHereVA]

FROM THE ARTICLE:

How Social Security and Medicare Transformed Aging in America.

Two lifelines for older adults reach important milestones in 2025.

By T.R. Reid, AARP. Published April 30, 2025.

After a long career as an office manager in St. Louis, Debbie Haupt retired at age 60 so she could provide full-time care for her ailing husband. “I had been planning to work at least until 68, maybe 70,” she says, “but Parkinson’s had other ideas.”

There was a problem, though: The Haupts hadn’t built up much of a retirement fund. “My 401(k) was tiny,” she laughs. “If I had eaten nothing but dog food, it would have lasted less than three years."

USE LINK BELOW TO READ THE ARTICLE: https://www.aarp.org/social-security/social-security-medicare-changed-aging/

[GailL1]

From the link ~

Together, Social Security and Medicare transformed the meaning and experience of old age in the United States,”

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Not just the old age - also the disabled and the survivors - but thru the years we have added and modified the benefits so severely that now both programs are in jeopardy of insolvency in the next (10) years or so.

• Do you think Roosevelt planned for DIVORCED spouses to get benefits if they remain eligible?  Not just get benefits but to get benefits before their X begins to get their benefits.
• Do you think that it was in the initial plan that a disabled Adult child of a beneficiary get Social Security benefits based on the record of a retired or disabled parent.  
• What about getting auxiliary Retirement benefits for your children less than 18 years of age even if the beneficiary begins getting their benefit at 62.  That certainly UPs the ole benefit amount for at least until the kids reach 18/19
• There are more . . . . 

My problem here is NOT that they get a benefit, I am sure that most are needed - my problem is that those controlling the purse-strings of the Social Security programs (Congress) have done so without accounting for the additional financial strain they are putting on the system.  

Our Government has NOT been good stewards of these programs.  

Congress needs to fix the programs - in a bipartisan manner.  And I am not talking about just one or two making a bipartisanship.  We need overall approval from all 535 of them - 

[Tonster521]

@gail1, you raise a valid point. Did Congress increase FICA tax rates enough to cover the costs of benefit modifications? Based on the current status of the SS program, it appears that Congress has failed especially since the last FICA tax rate increase was 1990. https://www.ssa.gov/oact/progdata/taxRates.html Of course, there are other approaches that Congress could have utilized to increase revenue. The obvious and probably the most productive is to increase FICA maximum earnings. Many folks, especially the lower earnings folks, do not realize that the folks earning above the FICA maximum are paying less FICA taxes on a percentage basis. For example, in 2025, someone earning $100 K pays a 6.2% FICA tax rate (excluding Medicare tax rate). Someone earning $200 K pays only 5.46% because earnings are only taxed up to the FICA maximum earnings or $176,100. Someone earning $300 K pays only 3.64% because of the above noted maximum. The percentage decreases as one's earnings increase because of the above noted maximum. In another post,

you provided a solution from Brooking wherein they suggested the maximum FICA earnings needs to be at least $346 K in order to attain the 90% of earnings threshold for all of the Covered Earnings. There are folks that have voiced their opinions to eliminate the maximum earnings cap altogether. However, you are clever to point out that high earning folks will find other ways to receive compensation and avoid FICA taxes (i.e., stock options, Sub-chapter S distributions, etc.). 

Congress has failed to address income equality which has cost the SS program over many years. I believe this issue is one of the reasons why there has been a revenue shortfall for years. As I recall, Brooking's report indicate that only about 83% of earnings are taxed when that number should be closer to 90% as it was in the past. Some readers may question those percentages stating that they pay FICA taxes based on 100% of their earnings. And, that is correct. But when you factor in the lower percentages of the highly compensated, the 90% threshold is reduced to about 83%. Is Congress naive, inept, or a combination of both? I suspect campaign donations may have an affect as well.

[SpringIsHereVA]

Oh yes, sometimes stuff comes our way that "mess up" the Retirement Plans we had set up way before retiring.

All we can do when this happens is to find a Plan B and do the best we can.

Hats off to OUR CAREGIVERS!!!  💛

Take care,

Nicole  👵