A couple of days ago I posted about loophole in the Social Security rules that screws people who also have a pension from a public sector job (teacher, fire fighter, police officer). Some of you probably yawned and thought, "What's he worried about? Social Security will be bankrupt for all of us by 2041."
We've been hearing that magic number - 2041 - for a few years now, but how accurate is it? As of right now, the Social Security Trust Fund continues to grow, both from payroll contributions and from the interest earned. Current retirees are paid from our current payroll taxes before the rest of your deduction goes into the trust. The "crisis" begins in 2018 (estimate) when the number of retirees reaches the point that we have to start withdrawing from the Trust. By various estimates, if there are no changes in either payroll taxes or Social Security benefits, the Trust will be emptied out sometime between 2041 and 2052.
If we do nothing to prevent this "crisis" we will still be able to pay at least 70% of Social Security benefits after the Trust is gone. We can easily avert the crisis if sometime between now and 2041 we do some combination of a) raising Social Security payroll taxes, b) lowering benefit levels for future retirees, and/or c) using other sources to pay out Social Security benefits (different tax, borrowing).
Oh, and if we accept privitization as the solution, the "crisis" begins on day one because there will be less money going into the fund than there will be coming out, and the "bankrupt" moment will come as soon as 2025, not 2041.
Those who want to privitize Social Security do not want to save it. These are the same groups who have been trying to eliminate Social Security since it began. They have taken advantage of a real need for minor reform to paint a picture of a crisis that simply isn't there in order to achieve their goals.
Read up on the facts at zFacts.com.
Tags: social security, politics, current affairs, privitization