The coming Social Security fight could be 1983 all over again

[bizaro86]

The Social Security surplus is invested in Government Securities that earn about 2.5%. The surplus runs out in maybe 8 - 9 years. It wouldn't be difficult to invest these funds to earn more than 2.5%. I think it's bs that the law makers haven't figured this out yet. Why should they ? They have their golden parachute retirement program.

Bill

CPP (the Canadian equivalent) is invested in a worldwide diversified portfolio and has a 10 year average return of over 8%.

https://www.cppinvestments.com/newsroom/cpp-investments-net-assets-total-714-4-billion-at-2025-fiscal-year-end/

That seems like a potentially good place to start, although like all the changes it would have been good to make it decades ago vs now.

 

[HitchHiker71]

I am not sure a law mandating a contribution for the entire population to a fund managed by a private entity will withstand a constitutional challenge.

No one ever said it would be managed by a private entity - it’s an account ownership issue - personal retirement accounts owned by we the people vs the unsustainable government owned and operated system we have today.

That said, IMHO anyone who still wants the same politicians who raided the SS fund with IOUs via T-Bonds that we now have to go to auction every month to replenish, to continue to “manage” your government retirement program, I’ve got a bridge to nowhere to sell you. I’d take private competent fund management over incompetent politicians any day of the week and twice on Sunday.


Sent from my iPhone using Tapatalk

 

[Brett]

CPP (the Canadian equivalent) is invested in a worldwide diversified portfolio and has a 10 year average return of over 8%.

https://www.cppinvestments.com/newsroom/cpp-investments-net-assets-total-714-4-billion-at-2025-fiscal-year-end/

That seems like a potentially good place to start, although like all the changes it would have been good to make it decades ago vs now.

Of course anyone could easily google "Canada pension plan vs social security" and see the differences and see the Canadian monthly government pension and/or SS disability insurance but -

It would probably be similar to googling "US healthcare system vs Canada healthcare system" and everyone (in this forum) knows the US has the GREATest healthcare system in the world, certainly surperior to those poor people up north

 

[am1]

I have said before and say again that raise the ages say a month each year and get rid of free loading spousal benefits. If a spouse draws on your social security then yours gets cut in half. Or base it on how long you are married. Benefits get split from the start and a spouse can receive half benefits from multiple spouses as long as one can only be married to one person at a time.

It is not difficult.

Or freeze cost of living increases and the problem will easily be inflated away.

 

[bizaro86]

Of course anyone could easily google "Canada pension plan vs social security" and see the differences and see the Canadian monthly government pension and/or SS disability insurance but -

It would probably be similar to googling "US healthcare system vs Canada healthcare system" and everyone (in this forum) knows the US has the GREATest healthcare system in the world, certainly surperior to those poor people up north

Oh for sure, and I'm not saying the Canadian system is perfect. CPPIB spends billions managing the money to earn those returns, and the contributions were reset much higher in the 90s. That made the system sustainable, but it also meant that I am paying contributions that cover all the payments I'll get and a bunch extra to cover the deficit from before the changes.

 

[easyrider]

I have said before and say again that raise the ages say a month each year and get rid of free loading spousal benefits. If a spouse draws on your social security then yours gets cut in half. Or base it on how long you are married. Benefits get split from the start and a spouse can receive half benefits from multiple spouses as long as one can only be married to one person at a time.

It is not difficult.

Or freeze cost of living increases and the problem will easily be inflated away.

Social Security was set up as a safety net for working families back in the day that women mostly raised the families. Even though times have changed and women have entered the work force, many continue to stay at home and raise families.

No, a spouse can't claim multiple benefits from different marriages. The spouse can claim benefits from the highest benefit available.

Bill

 

[am1]

Social Security was set up as a safety net for working families back in the day that women mostly raised the families. Even though times have changed and women have entered the work force, many continue to stay at home and raise families.

No, a spouse can't claim multiple benefits from different marriages. The spouse can claim benefits from the highest benefit available.

Bill

That's great but any money paid to the spouse should be taken from the working spouse. If one spouse is staying home which I admire then the working spouse should be able to earn more and half their contribution should go to the non working spouse. In my scenario non working spouses get credit based off the time married to each working spouse. Married to spouse 1 for 5 years give them 5 years of credit at half the working spouses amount and then marries spouse 2 for 10 years they get 10 years of half credit based on spouse 2s contribution.

My solution is modern and fair and cuts down on any abuse or double dipping.

If the law allows 3 people to marry or 1 person to be married to two at the same time I throw my hands up as that is too complicated for me.

 

[ScoopKona]

Cut the nonsense. In the end this report sums it up. Congress will be forced to act by making the changes outlined in this report.

The changes won't work because they weren't implemented in time. These changes needed to happen back in the late 20th century. And congress HAS. NOT. ACTED. FOR. DECADES.

What makes you think they're going to start now?

Twenty-six trillion dollar problem. And the easiest solution for them is to do nothing at let the automatic cuts happen. Nobody need lift a finger.

 

[billymach4]

The changes won't work because they weren't implemented in time. These changes needed to happen back in the late 20th century. And congress HAS. NOT. ACTED. FOR. DECADES.

What makes you think they're going to start now?

Twenty-six trillion dollar problem. And the easiest solution for them is to do nothing at let the automatic cuts happen. Nobody need lift a finger.

Same story in 1983. The problem should have been addressed in the 1970's. In 2033 or 2032 they will be forced to make the move. If not there will surely be a revolt.

 

[ScoopKona]

Same story in 1983. The problem should have been addressed in the 1970's. In 2033 or 2032 they will be forced to make the move. If not there will surely be a revolt.

Nope. People will simply take it. Eventually the program will cease to be relevant and it will die -- not with a bang, but with a whimper -- when checks no longer amount to beer money. People have spent their lives backing the wrong horse. This will be the legacy.

As for "2033 or 2032," that's when the OASDI depletes. Too late.

Maybe, just MAYBE someone tries something in 2029, 30, or 31.

Doubtful. Most Americans cheerfully have their head in the sand and refuse to acknowledge just how dire the problem is. "I've lost both engines. I can't see a runway. There's no safe place to crash land. And all controls are dead. But I'll just pull up! That'll work."

That's what the pundits are doing right now.

 

[billymach4]

Nope. People will simply take it. Eventually the program will cease to be relevant and it will die -- not with a bang, but with a whimper -- when checks no longer amount to beer money. People have spent their lives backing the wrong horse. This will be the legacy.

You are the next Nostradamus

In reality nobody really can predict the future. But I am not going debate about this subject and be a worry wart. I am however cautiously optimistic a future legislative solution will be found. You are welcome to your opinion as well.

 

[ScoopKona]

You are the next Nostradamus

In reality nobody really can predict the future. But I am not going debate about this subject and be a worry wart. I am however cautiously optimistic a future legislative solution will be found. You are welcome to your opinion as well.

I'm not predicting the future. I'm using the annual report from the Social Security Trustees. The reports where they have been doing the bureaucratic equivalent of "pressing the panic button" for 10 years now.

I've linked what is happening. Just nuts-and-bolts data without any spin. And I've explained why "remove the income cap" is last century's solution for today's problem.

It doesn't matter if anyone does anything with this information or not. I already worked my plan. And if you're right and somehow we fix this at the zero-hour, by finding $26 trillion dollars in the coin return of a phone booth, great. I have Social Security on top of my other retirement schemes.

But if this plays out the way the Social Security Trustees say it will, those who haven't bothered with a plan-B because "everything is going to be fine" -- will not be fine.

 

[andre10056]

I've read through some of the above. I think it might be helpful to listen to this "2 days ago" interview of the former Governor of Maryland and former head of Social Security, Martin O'Malley, to get a true (rather than wild speculative) assessment of the Social Security program..

 

[emeryjre]

I'm not predicting the future. I'm using the annual report from the Social Security Trustees. The reports where they have been doing the bureaucratic equivalent of "pressing the panic button" for 10 years now.

I've linked what is happening. Just nuts-and-bolts data without any spin. And I've explained why "remove the income cap" is last century's solution for today's problem.

It doesn't matter if anyone does anything with this information or not. I already worked my plan. And if you're right and somehow we fix this at the zero-hour, by finding $26 trillion dollars in the coin return of a phone booth, great. I have Social Security on top of my other retirement schemes.

But if this plays out the way the Social Security Trustees say it will, those who haven't bothered with a plan-B because "everything is going to be fine" -- will not be fine.

I had been doing less and less trading for the last 10 years
In the last 6 months, I have been back at it and going full tilt to increase my retirement funds
My Plan B

 

[ScoopKona]

I had been doing less and less trading for the last 10 years
In the last 6 months, I have been back at it and going full tilt to increase my retirement funds
My Plan B

I hope it works for you.

Team "remove the income cap" is doing this country a great disservice. Don't get me wrong -- remove it tomorrow. Great! I'm all for it.

But I also know that it's only going to buy us additional months at the status quo of "workers and incoming FICA vs. retirees and benefits paid out." Nobody is saying that part out loud except the Social Security trustees. (And they've been saying this for years.) Removing the cap will EASE the pain. It is not a cure.

Even if they pull out all the stops -- raise the retirement age (to 80, for all I care), remove the cap, means testing, open the immigration floodgates to put as many workers on payrolls as possible, there isn't enough time. We needed to do something before we started running massive deficits. We have too many beneficiaries, not enough workers. That's the whole problem. Short of a plague (a virulent one this time), there aren't any quick-fixes. And there aren't any happy fixes at all.

We don't have eight years -- we have whatever time between when we start taking this problem seriously, and when OASDI depletes. The worst part is when people realize we've been on the deck of the retirement Titanic for 20 years, it's going to be a fire sale of stocks, real estate and other hard assets. So their value will plummet -- thus worsening the societal pain.

 

[andre10056]

I hope it works for you.

Team "remove the income cap" is doing this country a great disservice. Don't get me wrong -- remove it tomorrow. Great! I'm all for it.

But I also know that it's only going to buy us additional months at the status quo of "workers and incoming FICA vs. retirees and benefits paid out." Nobody is saying that part out loud except the Social Security trustees. (And they've been saying this for years.) Removing the cap will EASE the pain. It is not a cure.

Even if they pull out all the stops -- raise the retirement age (to 80, for all I care), remove the cap, means testing, open the immigration floodgates to put as many workers on payrolls as possible, there isn't enough time. We needed to do something before we started running massive deficits. We have too many beneficiaries, not enough workers. That's the whole problem. Short of a plague (a virulent one this time), there aren't any quick-fixes. And there aren't any happy fixes at all.

We don't have eight years -- we have whatever time between when we start taking this problem seriously, and when OASDI depletes. The worst part is when people realize we've been on the deck of the retirement Titanic for 20 years, it's going to be a fire sale of stocks, real estate and other hard assets. So their value will plummet -- thus worsening the societal pain.

Since it's a pay as you go system, if Congress does absolutely nothing, there will still be 83% of benefits paid out in 2033. Even that "worst case scenario" result would not be too painful.

 

[ScoopKona]

Since it's a pay as you go system, if Congress does absolutely nothing, there will still be 83% of benefits paid out in 2033. Even that "worst case scenario" result would not be too painful.

That was years ago. Current estimate is 77%. And they've been moving the goalpost for the entirety of this century.

When all the younger workers realize they are paying into a flawed system, a great many of them will jump into gig work so they can keep all their money. They will say, "If I'm not going to get a retirement, why should anyone else?" And they will be completely justified saying that. So the potential is even worse.

I tell my friends and family to plan on 30%-ish cuts around 2030-ish. When average workers wake up to reality, the real predictions begin. There's also a very real chance that the rug gets pulled and nobody gets anything. There are a few ways this could happen. Years ago, I'd say "preposterous." But I'm saying "preposterous" to describe today's news, constantly.

Once again, here's the most recent trustee's report summary. You can get the in-depth report with all the numbers if you want to crunch them at the same site. Read it and weep.

Trustees Report Summary

A SUMMARY OF THE 2024 ANNUAL REPORTS

www.ssa.gov

 

[andre10056]

No. Not years ago. That 83% was the percentage mentioned by the last Social Security Commissioner Martin O'Malley 2 days ago. Take a look at who the Trustees might be at present (Robert F Kennedy Jr. among others). I don't have a lot of confidence in such people who might want to disparage the Social Security system because they have other plans for its trust fund.

Even 77% is not the disaster that warrants these "the world is coming to an end" pronouncements.

 

[ScoopKona]

Even 77% is not the disaster that warrants these "the world is coming to an end" pronouncements.

Now look at the curve since 2000. I remember when it was "2045" and "90%." We're in a feedback loop.

 

[andre10056]

All it will take is a tweek. And Congress has been tweeking for the last hundred years so that doesn't seem out of the question. Unless the powers that be WANT to destroy social security. In which case whoever has that as a goal should have his/her political career ended.

Watch the O'Malley interview. Too much false alarmist propaganda out there.

 

[ScoopKona]

Watch the O'Malley interview. Too much false propaganda out there.

I watched it. He hits on the things that will ease the pain:

1) More workers paying in (via immigration in the short term and finding a way to boost birth rates in the long term). Give me a 0-100% prediction of either of these things happening in the near future. Please. Your honest assessment that birth rates skyrocket, right now. Or that immigration skyrockets, right now. The two things that would help long term. Your prediction please. I'm no coward -- so here are my predictions. 0% and 0%.

2) He doesn't even support removing the income cap. He wants to carve out a "doughnut" for those making 170-250K per year. And since the cap is still in place, and not going anywhere in the near future, please explain how this is going to help. And again, since I'm not intellectually dishonest, my prediction that this will happen anytime between today and January 2029 is 0%. And I'm willing to wager a PROFOUND amount of money on this.

 

[easyrider]

My solution is modern and fair and cuts down on any abuse or double dipping.

There is no double dipping. There is no abuse of the system regarding spousal benefits. If anything, because the name of the program is Social Security, the stay at home mom should get more, imo.

Bill

 

[andre10056]

I watched it. He hits on the things that will ease the pain:

1) More workers paying in (via immigration in the short term and finding a way to boost birth rates in the long term). Give me a 0-100% prediction of either of these things happening in the near future. Please. Your honest assessment that birth rates skyrocket, right now. Or that immigration skyrockets, right now. The two things that would help long term. Your prediction please. I'm no coward -- so here are my predictions. 0% and 0%.

2) He doesn't even support removing the income cap. He wants to carve out a "doughnut" for those making 170-250K per year. And since the cap is still in place, and not going anywhere in the near future, please explain how this is going to help. And again, since I'm not intellectually dishonest, my prediction that this will happen anytime between today and January 2029 is 0%. And I'm willing to wager a PROFOUND amount of money on this.

He and I and you agree that we won't expand immigration in this country, at least not for the time being. Even though a comprehensive immigration strategy will be in our best interests for more reasons that just contributions toward social security. Nor will our birth rate go up because we know that Caucasians in the US have stopped having children.

But the income inequality situation where a person making $176,000 has to pay the same $10,000 to FICA as the person making $176 million seems like that can be tweeked.

And then, of course, any shortfall can be (and will be) funded via Congressional action.

No reason to scream the world's coming to an end because of Y2K (everything will stop working!) or some similar nonsense.

 

[ScoopKona]

$176 million seems like that can be tweeked.

It sure CAN be tweaked. I'm wagering (no upper limit - what's your net worth?) that there will be no tweaking at all between now and Jan. 1, 2029. You can pick the escrow company. As long as we agree to the terms of "income cap being raised from $176,000 to anything significantly higher than the annual inflationary rate" we have a deal. (The $176K number moves every year. But it doesn't move by much.)

I'm not just willing, but EAGER to put my entire estate into illiquidity until Jan. 2, 2029 if anyone cares to take this wager. May as well get something out of this horrible timeline.

 

[joestein]

For most working people, the way things have been going, the SS retirement benefit isn't keeping up with inflation. The average SS check is under $2,000 a month. If you are married and have two SS checks coming in, that average might be $4,000 a month until a spouse passes away, at which time you have $2,000 which can be a problem.

I doubt your scenario of $3 million will be considered poor . Many would retire early with a substantial monthly check. When a spouse passes away, the funds would go to whoever is named, most likely a spouse. This kind of ensures enough money to pay for long term care. Like you said, everything is relative and that would include adjustments to the SS fund.

The Social Security surplus is invested in Government Securities that earn about 2.5%. The surplus runs out in maybe 8 - 9 years. It wouldn't be difficult to invest these funds to earn more than 2.5%. I think it's bs that the law makers haven't figured this out yet. Why should they ? They have their golden parachute retirement program.

Bill

Lawmakers golden parachute retirement program is a fallacy. They have the same retirement program as any federal employee.