Baby Boomers Are Retiring - And It's Going to Have a Huge Impact on the Economy

[Blues]

I was just perusing some financial web sites this morning, and ran across several articles pertinent to this thread.

One factoid that surprised me. In 1983, 90% of all wages were subject to Social Security taxes (i.e., were under the cap, which was only $35,700 at the time). If you wanted to raise today's cap so that 90% of wages were taxed, you'd have to raise it to $270K.
http://time.com/money/4644332/maximum-social-security-benefit-2017/

That article references this scholarly publication, which confirms the $270K:
https://www.cbpp.org/research/socia...ayroll-taxes-would-strengthen-social-security

It discusses various proposals to increase SS revenue. I didn't realize that there were serious proposals to raise the wage limit subject to taxes, while keeping the old limit in the benefit calculation. That strikes me as eminently unfair. But there are also proposals to raise the wage limit, but include those wages in the benefit calculation, which strikes me as the fair way to do it. The article estimates that this would close about one quarter of the SS revenue gap.

The article also discusses proposals to include more fringe benefits in taxable SS wages, such as your employer-sponsored medical insurance. I hate that idea. As it is, I think that the 1983 change to tax 401(k) contributions was outright wrong. I don't think they should double-down on a bad idea.

 

[Jimster]

The SS system is basicly a Ponzi scheme. The government is taking today's collected dollars and PAYING the owed benefits immediately to claimants. There is no investment or pot of gold.

So.......the solution is what? Let's get rid of social security? I don't think so. Social Security was passed in 1935 and some of those who got benefits never paid in a cent. It was designed to provide relief but also to provide for reform. The idea is that those who get to old to work would not be penniless- that would be a serious drag on our economy.

Admittedly, there are more recipients and the recipients also draw benefits for a longer period of time. Also it is obviously a burden on the young. The point is what is the alternative.

First, congress should not raid the SS trust fund. Second and believe me it hurts me to say this since i contributed more than my fair share to the SS fund, there should be a means test applied to the benefits. Social security should not be a recipients total income- it was and should be a supplement to other savings or employment. The problem is many want to live well and work not at all and reap the benefits. That's not it. SS is not designed to provide you with what you want it is designed to provide what you need. Many people don't recognize the difference between want and need.

I have been retired for 16 years and despite the fact I don't get all i deserve from social security i am doing fine and recognize its purpose.



PS The 40 quarters discussed is to make you eligible for the program and Medicare. It does not fully describe your benefit. You also must have what are called "significant years". For me that means if i pay social security on about $40K a year. So even though i have about 150 quarters not all are significant years so i don't get the benefit i otherwise would get. This change went into effect in about 1985.

 

[WinniWoman]

Other than the very wealthy, the only other people that can be fine without it or with very little of it are the people with decent pensions. The majority don't have pensions and never earned a 6 figure income. So- yeah- they need to live off ALL of their SS and whatever they have in savings.

 

[geekette]

Other than the very wealthy, the only other people that can be fine without it or with very little of it are the people with decent pensions. The majority don't have pensions and never earned a 6 figure income. So- yeah- they need to live off ALL of their SS and whatever they have in savings.

I don't necessarily agree with this.

I can't speak for others, but the reason I have always invested aggressively is because I didn't feel it wise to expect SS to survive. If SS goes bust, I have it covered, without a pension. I realize that few began investing in their 20s but I think it is becoming more common since today's 20somethings have internet and discount brokers, which I didn't have. I have never cracked 6 digit income, either, and no spouse.

 

[PigsDad]

I don't necessarily agree with this.

I can't speak for others, but the reason I have always invested aggressively is because I didn't feel it wise to expect SS to survive. If SS goes bust, I have it covered, without a pension. I realize that few began investing in their 20s but I think it is becoming more common since today's 20somethings have internet and discount brokers, which I didn't have. I have never cracked 6 digit income, either, and no spouse.

I'm with you. When I graduated college and started working over 28 years ago, I started saving as if there would be no Social Security for me when I retired. I knew I wouldn't have have a pension, so it was up to me to save what I needed. Most people I knew back when I started my career had the same ideas -- don't rely on SS.

I definitely don't think that only the "very wealthy" or those with pensions are the only ones who are fine w/o SS. If you start saving early and are disciplined, you have a very good chance of being just fine in retirement.

Kurt

 

[Elan]

So.......the solution is what? Let's get rid of social security? I don't think so. Social Security was passed in 1935 and some of those who got benefits never paid in a cent. It was designed to provide relief but also to provide for reform. The idea is that those who get to old to work would not be penniless- that would be a serious drag on our economy.

Admittedly, there are more recipients and the recipients also draw benefits for a longer period of time. Also it is obviously a burden on the young. The point is what is the alternative.

First, congress should not raid the SS trust fund. Second and believe me it hurts me to say this since i contributed more than my fair share to the SS fund, there should be a means test applied to the benefits. Social security should not be a recipients total income- it was and should be a supplement to other savings or employment. The problem is many want to live well and work not at all and reap the benefits. That's not it. SS is not designed to provide you with what you want it is designed to provide what you need. Many people don't recognize the difference between want and need.

I have been retired for 16 years and despite the fact I don't get all i deserve from social security i am doing fine and recognize its purpose.

Very well put.

 

[wilma]

I don't necessarily agree with this.

I can't speak for others, but the reason I have always invested aggressively is because I didn't feel it wise to expect SS to survive. If SS goes bust, I have it covered, without a pension. I realize that few began investing in their 20s but I think it is becoming more common since today's 20somethings have internet and discount brokers, which I didn't have. I have never cracked 6 digit income, either, and no spouse.

Totally agree with your response. While it's comforting to some to whine about having no pension & demonize those who do, it is more constructive to take control of your retirement planning & make smart financial decisions.

 

[Sugarcubesea]

I don't necessarily agree with this.

I can't speak for others, but the reason I have always invested aggressively is because I didn't feel it wise to expect SS to survive. If SS goes bust, I have it covered, without a pension. I realize that few began investing in their 20s but I think it is becoming more common since today's 20somethings have internet and discount brokers, which I didn't have. I have never cracked 6 digit income, either, and no spouse.

I started saving into a 401K once I got my first decent job at age 26. Paid off my student loans and I saved like crazy and I had a pension and then the Great Depression (our state took a harder hit than other states) hit and my pension went to the pension board where if I'm lucky I will get 10% of what I was suppose to get since our company's pension was so severely underfunded.

Husband lost his job in the Great Depression along with just about every neighbor in our 76 home sub. It took him 5 years to get a job with benefits. Our neighbors on both side of our home had to declare bankruptcy, lost their homes and moved out of state for jobs. I had to use my emergency fund and tap into husbands 401K to keep the house

I did everthing right and I will need to rely on SS to survive

 

[geekette]

I started saving into a 401K once I got my first decent job at age 26. Paid off my student loans and I saved like crazy and I had a pension and then the Great Depression (our state took a harder hit than other states) hit and my pension went to the pension board where if I'm lucky I will get 10% of what I was suppose to get since our company's pension was so severely underfunded.

Husband lost his job in the Great Depression along with just about every neighbor in our 76 home sub. It took him 5 years to get a job with benefits. Our neighbors on both side of our home had to declare bankruptcy, lost their homes and moved out of state for jobs. I had to use my emergency fund and tap into husbands 401K to keep the house

I did everthing right and I will need to rely on SS to survive

Indeed, the first "pension vaporized" story I knew was the mother of my best friend, back in the late 70s. The company she had worked at for more than 20 years was bought and her pension was taken away. She was still working at JC Penney's in her 80s last I knew.

One can do everything right and still be screwed. Maybe one day it is me, too. We are all one accident or act of nature away from calamity. I try to stay humble and keep my needs simple in order to continue believing that I can handle anything that comes at me.

SS is for some of us a safety net and for others a critical source of retirement income. Either way, I don't want to see means testing nor benefit cuts.

 

[WalnutBaron]

This discussion reminds us all of why Social Security is still considered "the third rail of American politics". It's unsustainable and has to be changed--and radically so--sometime before the middle of the next decade, or it will run out of cash. But the remedies are going to be tough--and it will require real leadership to tell the American people that changes are going to have to be made in order to make it sustainable.

These are among the tough choices:

1. Raise the retirement age. As I mentioned in earlier posts, when the program was created in 1935 and the retirement age was 65, average life expectancy was 61. Today, life expectancy is 79 and one can begin to draw Social Security benefits as early as 62. Those numbers don't work. I would immediately raise the age to 70, and index retirement age to life expectancy.
2. Raise the taxable salary cap, or remove it altogether. This will ensure that those at the highest income levels are contributing fully, which is not the case today.
3. Remove non-contributors from the rolls. If you haven't worked and contributed to the Social Security fund, you're not eligible to receive benefits. Period. Many will howl that this discriminates against disabled children, or spouses who worked at home raising the family and therefore were not drawing a paid wage which triggered payments into the system. Maybe so. There are other kinds of social support for disabled kids--and Social Security at its core was set up as a retirement benefit and should remain so. As for the homemaker spouse, as long as the spouse remains married, he/she draws from the working spouse's benefits. If divorced, the spouse who bore the brunt of childcare expenses should be the one receiving the surviving spouse's benefit.
4. Remove the wealthiest Americans from the rolls. They don't need it, and shouldn't be able to collect it. Yes, they likely paid a huge portion into it--and while I am not a proponent of penalizing the wealthy, this is one concession to a so-called progressive tax structure that I can live with.
5. Encourage greater individual savings through expansion of Health Savings Accounts by setting up accounts which cannot be touched until a person is 65 or older, or unless that person is faced with a potentially life-threatening disease or injury. Unlike 401k programs which are ultimately taxable, HSA's are not taxable. Perfect. Expand the program, but make the new HSA's untouchable until retirement--when a person's demand for healthcare services usually peaks anyway.

I'm glad I'm not a politician. Getting this right will not be easy, and there will inevitably be screams of protest no matter how the system is reformed. But it's like having a sore tooth--it's not going to get better without treatment, and the treatment is not going to be pleasant.

 

[Sugarcubesea]

Indeed, the first "pension vaporized" story I knew was the mother of my best friend, back in the late 70s. The company she had worked at for more than 20 years was bought and her pension was taken away. She was still working at JC Penney's in her 80s last I knew.

One can do everything right and still be screwed. Maybe one day it is me, too. We are all one accident or act of nature away from calamity. I try to stay humble and keep my needs simple in order to continue believing that I can handle anything that comes at me.

SS is for some of us a safety net and for others a critical source of retirement income. Either way, I don't want to see means testing nor benefit cuts.

That has been my motto, I just try and stay humble and grateful. I feel very blessed that I now have a good job with a great 5% 401K company match and I feel thankful that I'm still working and I'm saving like crazy. I hope I can stay at this company for 10 years and then I can retire. However, I always keep my resume updated and I always stay in touch with my former colleagues to hear about job opportunities.

 

[WinniWoman]

I don't necessarily agree with this.

I can't speak for others, but the reason I have always invested aggressively is because I didn't feel it wise to expect SS to survive. If SS goes bust, I have it covered, without a pension. I realize that few began investing in their 20s but I think it is becoming more common since today's 20somethings have internet and discount brokers, which I didn't have. I have never cracked 6 digit income, either, and no spouse.

My husband and I started investing in our early 20's and we still can't retire without SS. True-we made some mistakes with it and there were also a lot of market downturns. Income has a lot to do with it.

We were "victims" of layoffs and company takeovers. We had to roll with the punches. We weren't perfect but we did the best we could. Certainly were not irresponsible with our money. But stuff happened.

 

[VacationForever]

My husband and I are comfortable and we still rely on SS to provide for about 50% of our retirement income. Can we survive without SS? Yes, but we will have to scale way down on our expenses.

If SS benefits has a means test, it is going to be hugely problematic. People are promised that they will get SS benefits when they retire. What wealth level is considered wealthy enough to not be paid SS benefits? The higher income folks who contribute to SS already has a wealth penalty built into the benefits. The more that they contribute the less they get back in those last dollars of contribution.

Starting SS benefits only at 70? Bad idea. At that age, not many people are in good health. Getting employment is diffciult if an older person loses one's job. One cannot live on air alone and wait for SS to kick in at 70.

Removing the ceiling is a way to get more money into the system, but it also means the SS benefits will need to be increased for those who put more into the system than the current ceiling, unless the formula changes in a way to further reduce benefits for those last dollars that are paid into the system. Lifting the contribution ceiling is certainly the quickest way to get more money into the system. Most likely the formula for how much benefits are paid will need to be reworked.

 

[geekette]

This discussion reminds us all of why Social Security is still considered "the third rail of American politics". It's unsustainable and has to be changed--and radically so--sometime before the middle of the next decade, or it will run out of cash. But the remedies are going to be tough--and it will require real leadership to tell the American people that changes are going to have to be made in order to make it sustainable.

These are among the tough choices:

1. Raise the retirement age. As I mentioned in earlier posts, when the program was created in 1935 and the retirement age was 65, average life expectancy was 61. Today, life expectancy is 79 and one can begin to draw Social Security benefits as early as 62. Those numbers don't work. I would immediately raise the age to 70, and index retirement age to life expectancy.
2. Raise the taxable salary cap, or remove it altogether. This will ensure that those at the highest income levels are contributing fully, which is not the case today.
3. Remove non-contributors from the rolls. If you haven't worked and contributed to the Social Security fund, you're not eligible to receive benefits. Period. Many will howl that this discriminates against disabled children, or spouses who worked at home raising the family and therefore were not drawing a paid wage which triggered payments into the system. Maybe so. There are other kinds of social support for disabled kids--and Social Security at its core was set up as a retirement benefit and should remain so. As for the homemaker spouse, as long as the spouse remains married, he/she draws from the working spouse's benefits. If divorced, the spouse who bore the brunt of childcare expenses should be the one receiving the surviving spouse's benefit.
4. Remove the wealthiest Americans from the rolls. They don't need it, and shouldn't be able to collect it. Yes, they likely paid a huge portion into it--and while I am not a proponent of penalizing the wealthy, this is one concession to a so-called progressive tax structure that I can live with.
5. Encourage greater individual savings through expansion of Health Savings Accounts by setting up accounts which cannot be touched until a person is 65 or older, or unless that person is faced with a potentially life-threatening disease or injury. Unlike 401k programs which are ultimately taxable, HSA's are not taxable. Perfect. Expand the program, but make the new HSA's untouchable until retirement--when a person's demand for healthcare services usually peaks anyway.

I'm glad I'm not a politician. Getting this right will not be easy, and there will inevitably be screams of protest no matter how the system is reformed. But it's like having a sore tooth--it's not going to get better without treatment, and the treatment is not going to be pleasant.

Wow, harsh. That would totally screw a lot people very quickly. People that have paid in for decades. Women would be horribly penalized, until such time as men carry the babies and raise them, wages become equivalent and men live and work longer so widows aren't again screwed. Expanding HSA helps only people that have high deductible med plans and decent incomes, again screwing women with kids. Forcing additional savings from a person's working paycheck while forbidding it be used for its intended purpose is a stranger version of a very cruel SS. Pushing retirement age out immediately is another cruelty. My FRA is already 2 years past my fathers, so bumping another 3 years is not at all ok. Longevity statistics leave out that there are actual people with lives. Some drop dead in the office or in a workplace accident or by disease or car crash or natural disaster. Some beat incredible odds and hit 110. There is no true expected age of demise, we all get to be surprised. Yanking the rug out from under women would create a huge new poverty class of elderly women living the streets into their 90s. Back to exactly what SS was intended to prevent. Who wants this for their mother? When do we start adding work credits and salary for carrying, birthing and raising children?

 

[Jimster]

I would be interested to know if our Presidet is collecting social security. He is 70 years old so he is technically eligible. He said he would not take a salary but that is not what he did. He took the $400 K and then donated it to some charitable cause thereby costing the government more than any other President. It is costing us $400 K plus the cost of the deduction so ultimately he is getting nearly $500 K per year which is more than any other President in history.

I am sure there are many millionaires and billionaires getting SS. That is why a means test makes sense. Geekette was concerned about women's benefits (and rightly so). The means test would not discriminate by sex rather it would discriminate by income which makes sense. I don't think the amount of income needed to be subject to the means test needs to be low. Even denial to those earning $250 K or Moore would be a huge savings. Rather it should only discriminate against those most able to subsist on their own.

I am sure there would be arguments from people who would say they are being denied the pension they contributed to, but that is already the case. The changes in the 1980's substantially reduce my benefits under SS because I already have a government penson. Yet someone who has a pension from a private corporation does ot suffer this reduction in benefits.

The means test has been suggested by many congressmen and commentators. I do think there maybe a Constiutional issue to be overcome, but it would save SS billions annually.

 

[VacationForever]

I would be interested to know if our Presidet is collecting social security. He is 70 years old so he is technically eligible. He said he would not take a salary but that is not what he did. He took the $400 K and then donated it to some charitable cause thereby costing the government more than any other President. It is costing us $400 K plus the cost of the deduction so ultimately he is getting nearly $500 K per year which is more than any other President in history.

I do not want to get political and I also am not for or against the current President. If he takes 400K and turns around to give to charity, his deduction is only on that 400K. If he gives more, out of his other earnings, the deduction is against those earnings. 400K in Presidential salary does not turn into 500K in deduction. Why would it cost more than other Presidents?

 

[Jimster]

I was using him only as an example of a billionaire that does not need the money. But to answer the question. It costs us $400 K in salary and it costs us the reduction of income on his taxes which costs us almost another #100 K. So collectively it costs the taxpayer about $500 K. If he also gets SS then that adds to the tab. I also think Mark Zuckerberg shouldn't get SS or Bill Gates or any of the Waltons or any number of others that may be technically eligible. But at this point the Pres is the only old enough to actually collect SS from among the group i mentioned.

 

[lizap]

I don't necessarily agree with this.

I can't speak for others, but the reason I have always invested aggressively is because I didn't feel it wise to expect SS to survive. If SS goes bust, I have it covered, without a pension. I realize that few began investing in their 20s but I think it is becoming more common since today's 20somethings have internet and discount brokers, which I didn't have. I have never cracked 6 digit income, either, and no spouse.

The statistics which show how much $ people have saved for retirement is alarming. If you have a pot of $, the rule of thumb is that you can safely withdraw 4% per year during retirement (which some are now saying is too high). Most people are not going to have anywhere near 1 million when they retire; even if they did, this would only provide 40k in annual income. Assuming both spouses worked with a combined income around 100k, their retirement income would be around 76k a year (including ss) thus they would be taking a roughly 24% decrease in annual income upon retirement. Unfortunately retirement is NOT going to be golden for many.

 

[WalnutBaron]

Wow, harsh. That would totally screw a lot people very quickly. People that have paid in for decades. Women would be horribly penalized, until such time as men carry the babies and raise them, wages become equivalent and men live and work longer so widows aren't again screwed. Expanding HSA helps only people that have high deductible med plans and decent incomes, again screwing women with kids. Forcing additional savings from a person's working paycheck while forbidding it be used for its intended purpose is a stranger version of a very cruel SS. Pushing retirement age out immediately is another cruelty. My FRA is already 2 years past my fathers, so bumping another 3 years is not at all ok. Longevity statistics leave out that there are actual people with lives. Some drop dead in the office or in a workplace accident or by disease or car crash or natural disaster. Some beat incredible odds and hit 110. There is no true expected age of demise, we all get to be surprised. Yanking the rug out from under women would create a huge new poverty class of elderly women living the streets into their 90s. Back to exactly what SS was intended to prevent. Who wants this for their mother? When do we start adding work credits and salary for carrying, birthing and raising children?

Certainly not meant to be harsh. But on an actuarial basis, the SS system will fail by the end of the next decade without major reform. If delaying retirement age and reducing benefits is not the answer, what do you suggest? Raising the SS tax, which would place a huge burden on those in their 20's, 30's, and 40's just at the time that us Baby Boomers are drawing on the system? Talk about harsh--that would be it.

I'm about six years from hitting my maximum SS benefit level. Know what? I plan not to take it. Through savings and investments, I'll be fine without it. Ultimately, it's going to take all of us being willing to get at least partially "screwed" (to use your vernacular) in order to fix a system that--like every government program--started out with good intentions and has grown into a bloated and unwieldy and poorly-managed bureaucracy that is now unsustainable.

 

[isisdave]

Congress can eventually pick a combination of measures that won't screw anyone, if they don't wait too long. One of my biggest criticisms of government for the last 30 years is that they won't take mild measures soon enough to avoid having to make much bigger ones eventually. As businesses point out, they can cope with almost anything ... except surprises. They need a few years to get things lined up.

Let's not confuse "age when you stop working" with "age when you start SS," which are both often referred to as "retirement age." Anyone who loses a job after 60 is going to have a heck of a time getting one. I had to start SS at 62 when that happened ... but 5 months later was lucky to get a great job which suppressed benefits until I stopped at 66. This pretty much saved our retirement, as we were having to deplete the IRAs very early. Most people in that situation don't have such good luck.

One other thought here: just because our grandparents died around or before the time they stopped working doesn't mean that we should have to do that. That's part of "progress." Our health is much better, and I for one would like to enjoy a dozen years before settling into the rocker.

Remember, the average monthly benefit is only like $1300. Even with a working spouse, doubling this would make it hard to live very well other than in a mobile home in Kansas, unless your house is paid off. When the first spouse passes, living anywhere on $1300 is going to be darned hard.

Those of us on TUG are mostly fortunate enough to have substantial savings, but way more than half of the US don't. Whether the reasons that an individual doesn't have a lot saved are "good" or "bad", the reason for SS was to avoid having poor people in the streets.

I think a fair start would be to do something like this: tax salaries to $200k, then exempt 200-400k, then start again, perhaps at a different rate. Kind of like the Medicare tax now. Freeze max benefit at what it is now, adjusting for inflation. Maybe continue to ease FRA up a little at a time, but not past 70. And it won't happen, but coupled with this should be some kind of incentive for businesses to hire people past 60, so that we can afford to wait that much longer.

 

[WinniWoman]

Remember, the average monthly benefit is only like $1300. Even with a working spouse, doubling this would make it hard to live very well other than in a mobile home in Kansas, unless your house is paid off. When the first spouse passes, living anywhere on $1300 is going to be darned hard.

I keep saying this. Everything I read is based on two SS checks in retirement. I believe you really have to base it on one because there is a good chance one in a couple will be gone at some point.

It's just like when I started out when I was young. My grandmother used to say- try to live on your husband's salary and put yours away for extras and the future.

Was good advice then and good advice for when you retire. But this is why I have such a hard time trying to figure out what we are going to do in a few years from now. Might very well be a trailer in Kansas.

 

[WinniWoman]

I would be interested to know if our Presidet is collecting social security. He is 70 years old so he is technically eligible. He said he would not take a salary but that is not what he did. He took the $400 K and then donated it to some charitable cause thereby costing the government more than any other President. It is costing us $400 K plus the cost of the deduction so ultimately he is getting nearly $500 K per year which is more than any other President in history.

I am sure there are many millionaires and billionaires getting SS. That is why a means test makes sense. Geekette was concerned about women's benefits (and rightly so). The means test would not discriminate by sex rather it would discriminate by income which makes sense. I don't think the amount of income needed to be subject to the means test needs to be low. Even denial to those earning $250 K or Moore would be a huge savings. Rather it should only discriminate against those most able to subsist on their own.

I am sure there would be arguments from people who would say they are being denied the pension they contributed to, but that is already the case. The changes in the 1980's substantially reduce my benefits under SS because I already have a government penson. Yet someone who has a pension from a private corporation does ot suffer this reduction in benefits.

The means test has been suggested by many congressmen and commentators. I do think there maybe a Constiutional issue to be overcome, but it would save SS billions annually.

First off, better a charity should have the Presidents' money than the government, which only wastes money with its huge bureaucracy. Hopefully it was a good charity that will truly help people.

Second, I am tired of hearing about women who stay home with their children and deserving everything working women who HAD to go to work get. Gee, I would have loved to stay home and then be entitled to benefits. Instead, I suffered through putting my son into various child care situations- some good, some bad.

In the real world, the women with children- most are out working to survive and also to better their families. Sure, some might stay home, but once the kids start school, many return to the workforce pronto unless their husbands make a lot of money.

At my job, what I see with the young women- many are having babies- staying single- to collect NYS's generous Medicaid/ACA benefits for themselves and their children, though many of them do live with their boyfriends and benefit from their income as well. Nice deal. Wouldn't it be even better if they could collect SS when they retire and not having to pay into it? Not for the taxpayers it wouldn't.

Let's face it. We all pay into the tax system-and a lot of our money goes to welfare and Medicaid, yet we do not personally benefit from it. Once you means test SS, it also becomes just another welfare benefit.

I don't know what the answer is....

 

[geekette]

First off, better a charity should have the Presidents' money than the government, which only wastes money with its huge bureaucracy. Hopefully it was a good charity that will truly help people.

Second, I am tired of hearing about women who stay home with their children and deserving everything working women who HAD to go to work get. Gee, I would have loved to stay home and then be entitled to benefits. Instead, I suffered through putting my son into various child care situations- some good, some bad.

In the real world, the women with children- most are out working to survive and also to better their families. Sure, some might stay home, but once the kids start school, many return to the workforce pronto unless their husbands make a lot of money.

At my job, what I see with the young women- many are having babies- staying single- to collect NYS's generous Medicaid/ACA benefits for themselves and their children, though many of them do live with their boyfriends and benefit from their income as well. Nice deal. Wouldn't it be even better if they could collect SS when they retire and not having to pay into it? Not for the taxpayers it wouldn't.

Let's face it. We all pay into the tax system-and a lot of our money goes to welfare and Medicaid, yet we do not personally benefit from it. Once you means test SS, it also becomes just another welfare benefit.

I don't know what the answer is....

My point would be that you suffered a penalty while pregnant, missing work, then had delivery costs, then recovery time. This is minimum for birth of baby. In most cases, women are financially punished for this time off, they don't get promotions, they don't get raises, they don't get paid for time off. Each baby puts a woman backwards financially. All this time off for one baby sends career off track. This isn't true for everyone, but happens a lot, too much, and impacts your earnings from which SS is derived. I was mommy tracked, altho I never wanted kids. I was told that I would want them someday so the promotion goes to the single guy, tho I was most qualified. One creep in a heap of jobs, but not the only one.

I doubt people stay single In Order To collect but that to me implies a household income test on those benefits vs forcing marriage. I'm not sure what to do with young single mothers but starving the kids isn't the answer and not all deadbeat dads can be made to pay child support. SS is not floating babies so it's a completely different matter. Taking time from career to have a baby puts her behind on career and wages and the lower the economic rung, the less likely she is paid for time off when she or baby is sick.

I guess I remain appalled that having and raising children is still not considered Work, still falls to women, women still punished financially for it. Some people make better mothers than any other profession they could choose but our society does not support that. SS is based on dollars earned, period, propagating the species doesn't enter into it. Weird, since we all need a lot more young taxpayers the older we get.

 

[WalnutBaron]

My point would be that you suffered a penalty while pregnant, missing work, then had delivery costs, then recovery time. This is minimum for birth of baby. In most cases, women are financially punished for this time off, they don't get promotions, they don't get raises, they don't get paid for time off. Each baby puts a woman backwards financially. All this time off for one baby sends career off track. This isn't true for everyone, but happens a lot, too much, and impacts your earnings from which SS is derived. I was mommy tracked, altho I never wanted kids. I was told that I would want them someday so the promotion goes to the single guy, tho I was most qualified. One creep in a heap of jobs, but not the only one.

I doubt people stay single In Order To collect but that to me implies a household income test on those benefits vs forcing marriage. I'm not sure what to do with young single mothers but starving the kids isn't the answer and not all deadbeat dads can be made to pay child support. SS is not floating babies so it's a completely different matter. Taking time from career to have a baby puts her behind on career and wages and the lower the economic rung, the less likely she is paid for time off when she or baby is sick.

I guess I remain appalled that having and raising children is still not considered Work, still falls to women, women still punished financially for it. Some people make better mothers than any other profession they could choose but our society does not support that. SS is based on dollars earned, period, propagating the species doesn't enter into it. Weird, since we all need a lot more young taxpayers the older we get.

Geekette, I almost always find your posts both thought-provoking and insightful, especially when it comes to financial management and investing. And I congratulate you for your success in saving and investing for your own account over the years. But, for some reason, you seem to have gone off the rails in parts of this discussion. No one, for example, has suggested that "starving the kids is the answer". That demeans an honest debate as we all try to ferret out answers to this perplexing public policy question. It's a common tactic for people to mis-characterize an argument of an opponent and take it to an unreasonable extreme in order to buttress their own argument, but it actually serves to do the opposite. (Let me also say that I appreciate the mods' allowing this debate to continue without labeling it "too political"...it's an important question that needs to be had in the public square.)

In my original suggestions on this topic, I said that removing ex- or current spouses who had not paid into the system and who had not raised any children from a marriage should not be eligible for the other spouse's Social Security benefits. If someone marries four times, divorces four times, how is it reasonable that all five people potentially draw benefits when only one contributed to the system?

Regarding children, we all know there are literally dozens of social programs in America that are designed to help poor or underprivileged or special needs children. And we also know that if SS benefits to those kinds of kids were discontinued, neither the constituents, public interest groups, or the political climate in general would allow kids to fall through the cracks, meaning some kind of replacement program would be created to take its place.

My point is that Social Security--which, though being poorly managed by Congress is actually one of the better-managed and most prized public programs in the country--was created to offer retirement benefits and should be returned to its original charter. The more it becomes bloated with new and additional obligations, the more complex it becomes, the more opportunity there is for fraud, and the more it strays from its original charter, the closer it is to collapsing under its own weight.

I appreciate the ideas offered by isisdave in Post #70. He's right: the sooner Congress gets on this and fundamentally reforms Social Security to make it actuarially sound for the next 50 years instead of the next 8, the softer the impacts will be to all generations either receiving benefits or paying into the system. Right now, Congress is doing what it does best: ignoring the problem until it becomes a crisis, at which time any fixes will be severe, ultimately unfair to many, and prohibitively expensive and even wasteful.

 

[lizap]

Certainly not meant to be harsh. But on an actuarial basis, the SS system will fail by the end of the next decade without major reform. If delaying retirement age and reducing benefits is not the answer, what do you suggest? Raising the SS tax, which would place a huge burden on those in their 20's, 30's, and 40's just at the time that us Baby Boomers are drawing on the system? Talk about harsh--that would be it.

I'm about six years from hitting my maximum SS benefit level. Know what? I plan not to take it. Through savings and investments, I'll be fine without it. Ultimately, it's going to take all of us being willing to get at least partially "screwed" (to use your vernacular) in order to fix a system that--like every government program--started out with good intentions and has grown into a bloated and unwieldy and poorly-managed bureaucracy that is now unsustainable.

I completely agree with this. We live in a state where most don't want to pay any taxes, BUT they want a free college education for their kids (in LA, college is basically free as long as you are a mediocre high school student), good roads, good schools, etc...