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Social security – will it be around when you retire?

March 15, 2010 · 5 comments

in Personal Finance

Ever since I was a teenager, I heard ‘Social Security will run out of money by the time you retire’.  Then as I got older and had a fuller understanding of what that meant, I found myself thinking ‘well I will never see a dime of all that money I have paid in Social Security taxes over the years’.  It was almost like it was a given- that it was just ok and accepted that millions of people could hand over 6.2 percent of their wages to the government, never to see it again.

Well, it is not ok.  The more I think about it, the sicker I get.  Pretend I told a bunch of people to give me 10 percent of their salary with the promise of an annuity payment 20 years later.   Then pretend I decided to use that money for other things I felt were more important, resulting in no money to all those investors.   I think I would end up going to jail, and rightfully so.  What else infuriates me is, we have no choice in the matter.  We HAVE to give 6.2 percent of our salary to the government, only to watch it be mismanaged.  We have no recourse.

I was reading an article this morning ( http://news.yahoo.com/s/ap/us_social_security_ious) where it states for the first time since the 80s, Social Security is going to pay out more in taxes than it takes in.  We all knew this was coming as the Baby Boomers started to hit retirement age.  Of course, for years there has been a surplus in Social Security, but the ever-reliable US Government borrowed against that Social Security surplus for other programs.  Sure, they issued IOUs,but now the US will have to borrow money from somewhere else to pay off those IOUs to Social Security.  It is just a mess.

I can’t believe that over the years I have just accepted that so much of my money was just going to go down the drain.  Maybe it is because retirement always seemed so far away that I just didn’t put much thought into it.  It is projected that Social Security will run out of money around 2037.   It will be interesting to see what happens as time passes and the money dwindles away.  How will Americans take it?  Will some sort of revolution start?  I know that I don’t trust the government even at the city level (but then again, I live in a suburb of Detroit), let alone at the federal level.  I imagine that sentiment is only going to increase as the possibility of Social Security going broke increases.

I guess I will just have to continue to prepare for retirement through 401k programs and other investments.  The whole problem with Social Security seems so huge that I don’t even know how to get involved to make a difference.  Maybe I will do more research and go from there.

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{ 2 comments… read them below or add one }

Budgeting in the Fun Stuff May 13, 2010 at 4:32 pm

I’m pissed since we are retiring in 2035.

According to the paperwork they send us, although “the trust funds will be depleted by 2037… the funds paid by workers would be enough to pay about 76% of your scheduled benefits.”

Yeah, I’ll believe it when I see it and I will participate in protests when they take away my benefits without giving me a refund. But, like you, we plan for retirement like we’ll never see a dime.

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John Kohl@checks and balances March 4, 2011 at 2:13 pm

Social Security has become a huge issue and no one in power has seem to do anything about it. I have to agree with all points you made in your post.

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