Reply
Trusted Contributor

πŸ€” Is Social Security Going Bankrupt?

Hello Everyone!

 

Since going on the Retirement Social Security in 2020, I now "pay attention" to the media coverage saying it will not be around.

 

I THINK the last news article (senior moment/lol πŸ˜‚πŸ€£) said program would be out of money by 2035. Yikes! 😱

 

Any opinions?

 

Thanks,

Nicole πŸ™‚

1,428 Views
25
Report
Newbie

Hopefully Congress will act to provide a solution, but given the political divisions, I'm concerned we'll face cuts in the coming years, but hope I'm wrong?

There was a proposed bill in the House, which in part repealed the WEP and offered modest reforms, but it never reached the floor for a vote, though it has bipartisan support.

Trusted Contributor

(12/23/22) Hi @TonyM975828 , seems like they are more concerned about the refugees and so on and NOT about us. Happy Holidays, Nicole πŸ™‚

0 Kudos
438 Views
0
Report
Contributor

There have been no media reports stating that it won't be around. However, there are many reports (including direct from SSA) that in or around 2034 that the current funding will only support ~70% of benefits if congress does not act.

 

https://blog.ssa.gov/social-security-funded-until-2034-and-about-three-quarters-funded-for-the-long-...

 

It is highly unlikely for congress to not fix this through various means and options. In politics SS benefits are considered the third rail - politicians who touch it get fried.

Trusted Contributor

(12/23/22) Hi @RobertH514774 , thank you for stopping by to join our discussion. 70% would have me living in my car. Happy Holidays, Nicole πŸ™‚ 

0 Kudos
438 Views
0
Report
Newbie

If we consider that 75 million Babyboomers (like us) have been paying into Soc Sec for the last 80-odd years, I think its highly unlikely tht soc sec should be bankrupt any time soon. The problem is that soc sec is being given freely to illegal immigrants for hotel housing, free phones, and food. This is being kept quiet and so is the fact that some on disability have never worked and paid into the system but get monthly checks starting at before retirement age. Many people are genuinely hurt/sick and need the help, but we need for those who draw disability without being truly disabled to be kicked off the program. Each state should shoulder the responsibility for it's citizens.

Trusted Contributor

Hi @MaryG229465 , I was thinking of you and "tried" to send you an AARP PRIVATE MESSAGE but you are NOT set up for them. I am HOPING you see this post and post some more. Lol, the Social Security Forum can be a little "rough" at times and I try to stay out of it/πŸ€£πŸ˜‚. Come join me in the OTHER FORUMS please. Don't stay away! The ROCK 'N ROLL group made me feel welcome. So did the OUR FRONT PORCH group. I am here always... Nicole πŸ™‚

0 Kudos
1,061 Views
0
Report
Trusted Contributor


@MaryG229465wrote:

If we consider that 75 million Babyboomers (like us) have been paying into Soc Sec for the last 80-odd years, I think its highly unlikely tht soc sec should be bankrupt any time soon. The problem is that soc sec is being given freely to illegal immigrants for hotel housing, free phones, and food. This is being kept quiet and so is the fact that some on disability have never worked and paid into the system but get monthly checks starting at before retirement age. Many people are genuinely hurt/sick and need the help, but we need for those who draw disability without being truly disabled to be kicked off the program. Each state should shoulder the responsibility for it's citizens.


πŸ‘‰(11/30/22) Hi @MaryG229465 !

Great points and I appreciate you stopping by. πŸ™‚

Yes, a lot of fraud with "pretend disability" that unless someone who KNOWS reports them, NEVER gets noticed.

As far as the ILLEGALS, here in Roanoke, Virginia we have HARD WORKING adults "homeless" while the churches here keep flying in thousands of refugees. Between the "illegal" Mexicans across from me (24/7 traffic) and refugees in my neighborhood, we cannot get any help = grants depleted. And yes, zero being done and I am not feeling safe at age 64 and living alone.

My heart hurts so much every time I hear or read anout a HOMELESS LEGAL American here who lost their legal job. Here they are laying people off daily.

Tears are in my eyes when I think of what my neighbor, who was a Veteran in his 70's went through.

Then in Salem, Virginia where I get gas at Sheetz, they want to close the ONLY Veteran's Hospital we have.

It is like America cares more about the refugees and illegals.

John passed away this year 2022 on August 8th. Rest in Peace, you gave so much to your country.

Nicole 😭 πŸ‘ˆ

0 Kudos
1,271 Views
0
Report
Trusted Contributor

Newbie β€œMary”:

Your posting is amazingly full of falsehoods.

WRT your first sentence:

Baby Boomers are defined as people born between 1946 and 1964.

The oldest Baby Boomers are now 76 years old.

You state that Baby Boomers have been paying into Social Security for β€œthe last 80-odd years.” That would be from before they were born, even before they were conceived, literally two decades before they were old enough to work. Please explain. I’m waiting.

WRT your second sentence: Undocumented immigrants are not allowed to collect Social Security, but many actually pay into the system, subsidizing it for others. (Estimates are that they pay billions.)

I won’t waste my time further on the rest of your falsehoods.

Note that this AARP website has many informative videos and quizzes about how Social Security works.

Trusted Contributor


@naxoswrote:

Newbie β€œMary”:

Your posting is amazingly full of falsehoods.

WRT your first sentence:

Baby Boomers are defined as people born between 1946 and 1964.

The oldest Baby Boomers are now 76 years old.

You state that Baby Boomers have been paying into Social Security for β€œthe last 80-odd years.” That would be from before they were born, even before they were conceived, literally two decades before they were old enough to work. Please explain. I’m waiting.

WRT your second sentence: Undocumented immigrants are not allowed to collect Social Security, but many actually pay into the system, subsidizing it for others. (Estimates are that they pay billions.)

I won’t waste my time further on the rest of your falsehoods.

Note that this AARP website has many informative videos and quizzes about how Social Security works.


πŸ‘‰(11/30/22) Hi @naxos , I do not want the Moderators/AARP to remove this "thread" due to tension. So let us AGREE TO DISAGREE and leave the "personal comments" at home. @MaryG229465 is a NEW MEMBER and we need New Members and I want them to feel "safe" joining this discussion. And yes, everyone here knows there is data on the AARP website. Thank you for understanding, Nicole πŸ™‚ πŸ‘ˆ

0 Kudos
1,267 Views
0
Report
Honored Social Butterfly

SS was set up where the current workforce pays for the retires. That means it has always been running out of money and always will be unless the approach is changed. To date it has always been fixed to keep it solvent. It needs to be fixed  so it always remains solvent, and that can be done.

Bronze Conversationalist

@john258I agree that the sources of revenue need to be increased rather than the "accross the board" reduction in SS Benefit payments which appears to be scheduled for 2034/2035. Most folks will automatically think increasing FICA tax rates is an easy solution. However, that solution places the burden on lower income folks. Although that may be a solution that Congress will implement, it appears to me to be another provision that has lower income folks subsidizing higher income folks. Perhaps FICA tax rates should be based on a progressive scale similar to Federal income tax brackets. In other words, at certain income thresholds, FICA tax rates increase for those folks. If you think this is out of the ordinary, you need to review the taxation of SS Benefits. If your income exceeds a certain threshold after you start receiving SS benefits (i.e, for Single with $25 K to $34 K up to 50% is federally taxable, for single with greater than $34 K up to 85% is federally taxable, etc.), you are repaying SS Benefits. Because it is part of one's Federal Tax return, some folks believe this money is kept by the U. S Treasury. It is not. The tax money collected by the 50% threshold is returned to the OASDI SS Trust. And the extra tax money collected by the additional 35% threshold in returned to the SS Medicare Trust. In other words, you receive SS Benefits; and, if you exceed certain income thresholds, you pay the SS Trust(s) back. This approach can be implemented while one is working just as easy after one starts receiving SS Benefits.

Next, I disagree with your statement that SS has always been running out of money. I am providing a link to SS Trust Fund Data that indicates the surplus years versus the deficit years https://www.ssa.gov/oact/STATS/table4a3.html The surplus was almost $3 Trillion. It is the surplus that is decreasing. If nothing is done to stop the decrease, the surplus is projected to be depleted by 2034/2035.

1,237 Views
10
Report
Honored Social Butterfly

Here is a simple way to start. Look at a flat tax on all income including investment. Everyone would have a starting point with the same amount of total income taxed.

Bronze Conversationalist

@john258I do not understand your posting. FICA is a flat tax (7.65% employee/7.65% employer or 15.3%).However, investment income is not subject to FICA. Are you proposing for individuals to pay more additional FICA tax on investment income? Are you eliminating employers from the 50%/50% ratio? Will the FICA tax on investment income be 15.3%? Also, are you proposing adding investment income to Earnings for the SS Benefit formula? As you may or may not be aware, annual limits or tax caps also apply when Earnings are used in the SS Benefit computation. Will investment income increase those annual limits? If not, it appears that highly compensated folks (above $147,000) will not pay any FICA tax on their investment income.

Honored Social Butterfly

Did not think you would. I gave a starting point. See how much a flat tax on all income would bring in then work from there. One thing it solves. Every one would be paying the % of their income into the fund.

No one in here will solve this period. There are experts who can so let them do their work.

Bronze Conversationalist

@john258Everyone will not be paying the same percentage of their income to the SS Program. You would need to eliminate the annual limits or tax caps that are currently $147,000/year. As it currently stands, highly compensated folks pay a lower percentage of their total Earnings than non highly compensated folks even with the current flat tax rate of 15.3%. This is due to the annual limit or tax cap. As I understand your posting, the tax increases you suggested on investment income will be paid by the folks who earn less than the annual limit/tax cap (i.e., $147,000 currently). Moreover, employers do not pay any additional taxes. You are close to the proverbial "third rail". My suggestion is do not run for any political office.

IMO, the only way to keep this approach on a " level field" is to raise or eliminate the annual limits/tax caps. Then the next issue will be whether you include investment income in the SS Benefit formula as Earnings. If so, the current maximum SS Benefit which is $3,345/month (single Old Age aka retirement) will increase exponentially for the folks with substantial investment income. There is a chance that the SS Trust remaining amount may deplete before the estimated 2034/2035.

If you read the link to the SS article from 2010 that Nicole included in her 11-29-22 posting, you will learn that the SSA was forecasting depletion in 2037. It has now be projected to deplete in 2034/2035. If you reviewed the link to the SS Trust data/stats that I included in my 11-30-22 posting, you would know that 2008 was the last year when Net Payroll Tax Contributions ($672 Billion) covered the cost of the SS Program ($625,143 Billion). Since 2008, interest and income taxes on SS Benefits have saved the SS Trust from beginning the depletion spiral. That ended in 2021 when the SS Trust reduced $56,256 Billion. The "Alarm" has been sounded by the actuary for at least a decade and Congress had done little. Who are the "experts" that you are referring to?

Honored Social Butterfly

My answer was a starting point. Everyone would be paying the same % of their income. Then you let the experts take over and do the rest to come up with the final rates. There are no experts in here and that is why no one should ever accept or follow what is posted in here with out talking to local experts or AARP experts first.

Trusted Contributor



@john258wrote:

My answer was a starting point. Everyone would be paying the same % of their income. Then you let the experts take over and do the rest to come up with the final rates. There are no experts in here and that is why no one should ever accept or follow what is posted in here with out talking to local experts or AARP experts first.


@john258wrote:

My answer was a starting point. Everyone would be paying the same % of their income. Then you let the experts take over and do the rest to come up with the final rates. There are no experts in here and that is why no one should ever accept or follow what is posted in here with out talking to local experts or AARP experts first.


πŸ‘‰.(12/5/22) .Hi @john258 , I have NEVER seen anyone from AARP in this forum. Maybe in the past. And I am not sure and doubt it, that they are going to "train" someone to answer our questions. But, who knows, I may be wrong. Anyway, I started this thread for a "nice friendly" chat with everyone and realize there may be certain posts I may not agree with. At age 64, I have finally learn't to agree to disagree. 🀐 .I do APPRECIATE your "participation" in our discussion. Thanks, Nicole πŸ™‚ .πŸ‘ˆ

0 Kudos
840 Views
0
Report
Honored Social Butterfly

Would everybody then get the SAME benefit?

It's Always Something . . . . Roseanna Roseannadanna
Trusted Contributor


@Tonster521wrote:

@john258I agree that the sources of revenue need to be increased rather than the "accross the board" reduction in SS Benefit payments which appears to be scheduled for 2034/2035. Most folks will automatically think increasing FICA tax rates is an easy solution. However, that solution places the burden on lower income folks. Although that may be a solution that Congress will implement, it appears to me to be another provision that has lower income folks subsidizing higher income folks. Perhaps FICA tax rates should be based on a progressive scale similar to Federal income tax brackets. In other words, at certain income thresholds, FICA tax rates increase for those folks. If you think this is out of the ordinary, you need to review the taxation of SS Benefits. If your income exceeds a certain threshold after you start receiving SS benefits (i.e, for Single with $25 K to $34 K up to 50% is federally taxable, for single with greater than $34 K up to 85% is federally taxable, etc.), you are repaying SS Benefits. Because it is part of one's Federal Tax return, some folks believe this money is kept by the U. S Treasury. It is not. The tax money collected by the 50% threshold is returned to the OASDI SS Trust. And the extra tax money collected by the additional 35% threshold in returned to the SS Medicare Trust. In other words, you receive SS Benefits; and, if you exceed certain income thresholds, you pay the SS Trust(s) back. This approach can be implemented while one is working just as easy after one starts receiving SS Benefits.

Next, I disagree with your statement that SS has always been running out of money. I am providing a link to SS Trust Fund Data that indicates the surplus years versus the deficit years https://www.ssa.gov/oact/STATS/table4a3.html The surplus was almost $3 Trillion. It is the surplus that is decreasing. If nothing is done to stop the decrease, the surplus is projected to be depleted by 2034/2035.


πŸ‘‰ (11/30/22) Awesome you stopped by @Tonster521 , was hoping you would!!! Why? I have been reading your very helpful responses to the questions posted in this forum. Nicole πŸ™‚ πŸ‘ˆ

0 Kudos
1,234 Views
2
Report
Bronze Conversationalist

@APassionateLifeThanks for your positive reply.

Trusted Contributor


@Tonster521wrote:

@APassionateLifeThanks for your positive reply.


πŸ‘‰ (22/1/22) You are welcome @Tonster521 πŸ‘Œ Nicole πŸ™‚ πŸ‘ˆ

0 Kudos
1,076 Views
0
Report
Trusted Contributor


@john258wrote:

SS was set up where the current workforce pays for the retires. That means it has always been running out of money and always will be unless the approach is changed. To date it has always been fixed to keep it solvent. It needs to be fixed so it always remains solvent, and that can be done.


πŸ‘‰ (11/30/22) Hi @john258 great hearing from you and I hope they fix the system soon rather than wait. Nicole πŸ™‚ πŸ‘ˆ

0 Kudos
1,265 Views
0
Report
Trusted Contributor

This is a copy&paste from the Social Secrity Website. I guess I will be going back to work in 2037. 😭 Nicole πŸ™‚

 

LINK TO INFORMATION ON SOCIAL SECURITY WEBSITE 

 

The concepts of solvency, sustainability, and budget impact are common in discussions of Social Security, but are not well understood. Currently, the Social Security Board of Trustees projects program cost to rise by 2035 so that taxes will be enough to pay for only 75 percent of scheduled benefits. This increase in cost results from population aging, not because we are living longer, but because birth rates dropped from three to two children per woman. Importantly, this shortfall is basically stable after 2035; adjustments to taxes or benefits that offset the effects of the lower birth rate may restore solvency for the Social Security program on a sustainable basis for the foreseeable future. Finally, as Treasury debt securities (trust fund assets) are redeemed in the future, they will just be replaced with public debt. If trust fund assets are exhausted without reform, benefits will necessarily be lowered with no effect on budget deficits.

0 Kudos
1,412 Views
2
Report

I do not have the time to plow through all the falsehoods on here. A 25% reduction in benefits is not the same thing as going bankrupt. If the SS tax was extended to the first $200,000.00 of income this problem would go away immediately. SS is not a great deal of money and if people need it to live on I am willing, as a Christian American, to see that they get it. I worked hard all of my life too. Big Deal!. I am comfortable because of it and stand a little less so that others may survive. People are so mean these days.

Trusted Contributor


@BradleyH872869wrote:

I do not have the time to plow through all the falsehoods on here. A 25% reduction in benefits is not the same thing as going bankrupt. If the SS tax was extended to the first $200,000.00 of income this problem would go away immediately. SS is not a great deal of money and if people need it to live on I am willing, as a Christian American, to see that they get it. I worked hard all of my life too. Big Deal!. I am comfortable because of it and stand a little less so that others may survive. People are so mean these days.


πŸ‘‰ (11/30/22) Hi @BradleyH872869 thanks for joining our discussion! I am glad you are "comfortable" with it. Have a great day, Nicole :).πŸ‘ˆ

0 Kudos
1,258 Views
0
Report
cancel
Showing results forΒ 
ShowΒ Β onlyΒ  | Search instead forΒ 
Did you mean:Β 
Users
Need to Know

"I downloaded AARP Perks to assist in staying connected and never missing out on a discount!" -LeeshaD341679

AARP Perks

More From AARP