Sunday, May 13, 2012

Enough About the Death of Social Security Already!

Every time I turn around, another article, news story, discussion or diatribe about Social Security pops up on the radar.

When a person is my age, and the prospect of Social Security is just around the corner (give or take six years), these articles, news stories, etc. take on new meaning.

And raise new fears.

If we read or listen to TV or surf the internet we all 'know' the Social Security system is a shambles, can't be repaired, and will be lucky to cover MY retirement, never mind that of my kids.

The recent 2012 Report from the Social Security Trustees brought another spate of scare stories.

In the report, the trustees projected that, largely because of changed economic conditions, Social Security would be able to pay full benefits only for 21 years, and 75 percent of the benefits after that assuming no changes were made.

The reaction to the report, and the media storm around it make one question the actual literacy of the press. Somehow, the news stories missed the parts of the report that refer to the shortfall (a shortfall that will exist ONLY if Congress does NOTHING to secure more funds) as "manageable." More than that, many of the news stories talked about Social Security running out of money in the forseeable future. Again, that's NOT what the report says. It says if NOTHING is done, the payouts will be reduced by one-quarter AFTER another two decades. I am not all that great at math, but even I know that three-quarters of a pay-out is not ZERO payout.

The Columbia Journalism Review has a very snarky 'review' of the press coverage.

As dysfunctional as our current congress is, I don't think the members (or their replacements in the next twenty years) are politically suicidal enough to allow Social Security to reduce payments by 25%, much less become bankrupt.

8 comments:

Maureen said...

People like myself who are going to retire on nothing more than a pension should be worried. My only hope is that Governments are going to find it too expensive to Institutionalise us if we have no money to keep ourselves at home, looks like I will just have to sit with my fingers crossed.....

nicoleandmaggie said...

It's Medicare that we have to worry about...

Sharon said...

Grace,
The news outlets have become so sleezy, all they report is the bad. I'm glad that you were able to read the actual report. I highly doubt social security will go bankrupt, these are all political ploys for the new election. Ugh.

Rachel C said...

Long time reader, first time commenter here.

Remove the cap on earnings, problem solved. No, we don't need to remove the cap on benefits; it's a safety net, not a retirement fund. Some people won't get what they paid in, just like other taxes. Also, stop decreasing the payroll tax by 2% every year. Yes, I like the extra cash every paycheck, but at what cost? Why is our government trying to bankrupt the most important safety net for our "elderly"? BTW-I do exceed the earnings cap, slightly. I like the bigger paychecks at the end of the year, but I'd rather keep an important program going so those who can't save enough for retirement on their own don't end up on the streets when no longer able to work. Thank you for all your insight, Grace. I always appreciate your blog posts.

Sightings said...

Hi, found you from "Living Richly in Retirement." I totally agree with your view of the coverage of SS -- but news outlets always overreact and panic about EVERYTHING, because apparently that's what attracts readers and viewers.

Also liked your discussion of houses vs. condos. I've lived in both, too, and also worried about the rules and regs. that would come with the condo, but personally they didn't bother me. The only problem I ever had was one noisy and obnoxious next-door neighbor who arrived with two vicious attack dogs and was the bane of my existence, until she was basically forced out by all the neighbors about 6 months later. So that's one other thing to watch out for.

Grace. said...

Rachel C--I completely agree. My sister, who is a retired banking executive says exactly the same thing, even though such a change would have affected her income greatly. Since the money comes out of paychecks at the first of the year, one's budget has to adjust to the lowered amount anyway.

Just me said...

Well at the ripe age of 44 I wonder what will happen IF and when I get to retire. While I dont think SS will go bankrupt I am not sure what the retirement age or anything else will be.

This is why I feel a need to be totally out of debt, to have our 401k and IRA funded(yeah working on that).

But like you I am sooooo tired of hearing the constant scare tactics!

Anonymous said...

Thank you for this and for the excellent link. I fired off a snarky response yesterday and somehow neglected to send it -- good thing since snark is not my forte. But -- this goes right to the core of what is ailing us -- very little considered debate or discussion of issues and lots of agenda-driven fear and hate mongering. I am sharing this info. with everyone -- again, thank you!