I have a birthday coming up in a few months--so the Social Security Administration sent me my annual benefits summary over the weekend. On the front page they nicely point out that unless the goverment raises the amount withheld for social security, the fund will begin paying out more than takes in starting in 2017--just nine years from now. If changes to payouts aren't made, the fund will go broke in 2041. I'll be 69-years old then--and hopefully still around to want to collect what I put in.
Remember the last Presidential election, when the solvency of Social Security was a major issue. The buzzword then was "lockbox". President Bush admitted that the SSA fund was actually a file cabinet with a bunch of IOUs in it. So both he and John Kerry talked about creating a "lockbox" that would contain money coming in from that point on to make sure the fund wouldn't run dry. Did we ever create that lockbox? Can someone tell me how much is in it? That's what I thought.
The candidates for the White House this time around haven't made much of an issue out of the Social Security crisis. Perhaps Democrats have decided that scare tactics didn't work in 2004--so that issue shouldn't be a priority. Republicans are probably happy to let that sleeping dog lie. Baby boomers have reached that age where they tend to make it a point to vote--and they don't want to hear they should have saved a little more during their working careers so they wouldn't have to depend on the system they are bankrupting.
While I'm not happy about Social Security's impending bankruptcy I'm not in a panic. My wife and I are on the Dave Ramsey Total Money Makeover Plan--so we should have enough socked away for a comfortable retirement whether the government can send us a check each month or not. If for some reason Baby Boomers do leave something behind for the rest of us--it will just be a bonus. Maybe those reaching their retirement age right now can send their unneeded economic stimulus rebate checks to the SSA to put away for their children's future--or their grandchildren's future--and stimuluate the economy when we will really need it.
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The social security trust fund depends on $2,351,419,000,000 in non-negotiable treasuries (March 31, 2008 balance) to supplement payroll taxes. In theory these treasuries and additional amounts to be accumulated by 2017 are what will be exhausted between 2017 and 2041. I do not know how income taxpayers will come up with enough to operate the government and to repurchase these treasuries.The federal government has not thought this one through.
ReplyDeleteExactly what IS the Dave Ramsey Total Money Makeover Plan???
ReplyDeleteSpend nothing, save everything, get out of debt and live happily ever after.
ReplyDeleteYou and your wife must be extremely compatible! :)
ReplyDelete