is Social Security funds about to run out soon?

Question

i see on the news, read on papers hear from people that Social security will soon run out of funds. if this is true then why am i still paying into it if im not going to get anything back from it when i retire?

Answer 1

Well...when will you retire? They're to run out in 2040. Just think...what you pay now helps your parents live out their lives a little bit better, and who knows, they might have some money left to you when they pass away. I assume there will be all hell to pay when these funds are depleted and the president at that time will have to make adjustments so everyone gets their share of the Social Security.

For now...try this, save for yourself. I read if a 21 year old puts $1,000 into a Roth IRA, that by the time he's 62 it'll be worth $50,000. So my suggestion to anyone...is to start saving money in a IRA (Individual Retirement Account) that you get at any bank, and start saving for yourself.

Wish you luck there.

Answer 2

No, Social Security will not run out of funds any time soon. If absolutely no action is taken by Congress then it may run short of sufficient funds to pay benefits at the current level around the year 2040. Even so, there are enough funds in the trust fund now and projected earnings to pay current benefits through 2040 and reduced benefits (at about 75% of current levels) in perpetuity. That's the worst case scenario.

There are any number of things that Congress could do.

1. Cut benefits now and forever to 90% of current levels. This would fix the system permanently based on current projections.

2. Gradually cut benefits over the next 20 years to 85% of current levels.

3. Change the full retirement age upwards. This is already being done although not quickly enough to salvage the system. It's been pegged at 65 since it's inception in the 1930s. At that time, the life expectancy was LESS than 65 years so not a lot of folks received it early on. With life expectancy approaching 80 it's probably time to start moving the full retirement age upwards more quickly. I personally plan on working well past 65 as do many of the folks I know so this isn't necessarily an issue of major concern to most.

4. Raise the Social Security tax rate. Obviously the most bitter pill, especially since other measures can go a long way without increasing the tax rates.

5. Raise or remove the SS tax ceiling. Currently only the first $97,500 in wages are subject to SS taxes. This amount is now indexed to inflation so it will raise again for 2008. The problem with this is that benefits are based upon lifetime earnings subject to SS taxes. Removing the ceiling simply raises the SS benefit checks of the wealthiest taxpayers, those who need it the least, without actually fixing anything.

6. Raise or remove the SS tax ceiling WITHOUT raising benefits for the highest earners. While this solution will raise a lot of noise from folks who have enough money to make themselves heard it is one of the most palitable for the average taxpayer and employer since most of us earn much less than the earnings ceiling. Our taxes would not change and neither would our benefits.

In the end Congress will act to preserve the system and prevent its collapse. And remember, even if nothing is done benefits can still be paid at 75% of current levels essentially forever -- painful to be sure, but hardly the doom and gloom of total collapse that some project. The longer that Congress waits the more painful the fix may be and as always, well-monied special interest groups may derail what would otherwise be the best solution for the average taxpayer and the nation as a whole. (Look what the Bush administration nearly pulled off -- turning a chunk of your safety net over to Wall Street and the folks who brought you WorldCom and Enron.)

Answer 3

Depends on what you mean by "soon". In around 30 years, if something doesn't change. Congress is going to have to bite the bullet and figure out what changes need to be made - maybe a later age for collecting, or a change in the way benefits or increases are figured.

You are still paying into it because you are legally required to. And there's no way that Congress would discontinue social security. They'll just have to change something to keep it solvent.

Answer 4

Social Security wouldn't be in trouble if we treated our poor & middle class much better. Higher pay (among other things) for these workers would generate more Social Security funds.

Answer 5

The gov't knows that we are sheep, and they may do as they wish with us. Right now they are testing the water to see if there will be rebellion, When we do nothing, they will go ahead and raid whats left. If our founding Fathers knew what followers we would become , they could have gone fishing instead of writing the 2nd amendment to the constitution.

Answer 6

Newsflash: if you are under 45 years old, you will get NOTHING from Social Security. This is a typical liberal program: started out as social insurance for rare situations, but they turned it into a method of taking money from productive people and giving it to groups that vote democrat. As usual when democrats manage money, it will all be gone soon.

Answer 7

its a democratic slush fund, and democratcs L O V E their tax money, they get to spend it on useless programs that make them feel real good, and that whats important right?

Answer 8

yes

Answer 9

hope not