medicare and social security?

Question

If social security is estimated to last until 2041 and medicare until 2019 ( in either case by the time I reach retirement , these funds will be depleted)..why do they continue to take these out of my paycheck? As my parents generation were working, didn't the money they put in go to fund their generations benefits? Why is money taken out of the younger generations benefits if they will not be able to benefit from it;. Couldn't I just take that money and invest it myself? Thanks

Answer 1

The money is taken out of your pay to pay current beneficiaries. That's the way that the system has ALWAYS worked.

While the SS Trust Fund and Medicare Trust Fund are in financial trouble, or at least are PROJECTED to be, there is little question that Congress will eventually act to resolve the issue.

The problem right now is that any solution will hit the wealthiest taxpayers, mostly by either raising or removing the cap on SS wages, and the current administration will not do that. They'd rather sell out to Wall Street -- remember the folks who brought us Enron and WorldCom -- than to tap the wealthiest taxpayers.

You SHOULD make additional plans towards your own retirement. SS alone will not provide much of a life for most folks and certainly not at whatever lifestyle you may have enjoyed during your most productive years. Avail yourself of the various options -- 401(k)s, IRS, Roth IRAs, Stock Bonus and Profit Sharing plans at work, etc. -- to help provide for your "Golden Years."

I wish that I had availed myself of IRAs when they first came out in the late 1960s. If I had, I'd be a multi-millionaire today. I've planned fairly well and will do OK in retirement but it COULD have been MUCH better if I had acted early in my working years. Start NOW, while you are young.

1. Social Security and Medicare WILL survive, but you should NOT depend upon them as your SOLE retirement account.

2. Start saving for your retirement while you are young and you'll do fine.

Answer 2

Both SSI and medicare can continue paying full benefits until 2041 and 2019, after those dates only 3/4 of the benefits will be payable if something isn't done. I'm sure that our parents and our parents parents didn't say its OK to lend out our hard earned money that the government is taking from our pay checks. The reform of SSI & Medicare should have started a long time ago, but the people of the United States Just didn't want to be heard. Here is a quote taken from McClatchy Newspapers, "Today's report confirms that the so-called Social Security crisis exists in only one place - the minds of Republicans," said Senate Minority Leader Harry Reid, D-Nev. "In reality, the program is on solid ground for decades to come." Seems to me that no one wants to answer the question about where is our money they just seem to lie or throw the blame somewhere else

Answer 3

You are under the impression that there is this great money market in the sky that money goes into to fund your social security when you retire.
The fact is that the government spends the funds quicker than it comes in. There is no big fund. Your parents generation funded the benefits of their parents generation and the amount being funded couldn't keep up with the spending decisions of the governments over the years. Their parents generation didn't even work under the social security tax for that many years yet they still received full benefits.
Your parents have paid the tax for all of their working lives and expect to see a benefit when they retire. \
The problem is how is the government going to work this out.

Answer 4

The money paid in now is funding current benefits.

I believe that something will still exist for these programs - it's not politically viable for congress to discontinue them, although at some point they're going to have to make some changes to the current system. The social security benefits are likely to be smaller, or at least not grow as fast as they are now to keep up with inflation.

Medicare might eventually become part of whatever is done with overall medical care in the US.

When Bush proposed a few years back that people be able to take a small portion of their social security contributions and invest them themselves in their own account, the general reaction was about like he'd suggested killing babies. Was being able to invest some of your own money a good idea - maybe. Will it happen - from the reaction that suggestion got, I'd guess not anytime soon.

Answer 5

a private voluntary SS and/or Medicare portfolio is what I prefer. Voluntary is the version. There does no longer be a reason in the back of needed purchase. If the government can tension me to purchase something no remember what, this is a slippery slope for finding out to purchase something in any respect.

Answer 6

Wouldn't it be nice if we could invest that money ourselves? I agree!

However, the money taken out of your check right now is being used to make the current SS payments. There isn't actually a fund with your name on it which is growing and drawing interest for when you are ready for it.

The SS program was originally supposed to be a safety net for widows and orphans. It has grown into a huge government handout instead. People should be saving for their own retirement instead of expecting the government to support them indefinitely.

When the program first started, the ratio of workers to recipients was much higher. I don't know the exact number off the top of my head but it was something like 20 workers to one recipient. The ratio has now dropped to something like 3 to 1.

SS needs to be abolished and personal responsibility needs to take center stage. What did people do before SS? The provided for their own needs. Their families took care of them. Churches and other charities took care of them. NOT the government.

Answer 7

It is called a Ponzi !