Category : Social Security

(Time) Penelope Wang-The Next President’s Financial Imperative: Fixing Social Security

Today some 60% of Americans age 65 or older rely on Social Security for 50% or more of their family income”“the average payment is a modest $1,300 a month. For some 33% of families, the benefit makes up 90% to 100% of their income.

There’s a lot at stake for the overall federal budget as well, since entitlement programs are grabbing a larger and larger overall share of federal expenditures. Social Security alone accounts for $1 out of every $4 spent, and Medicare and Medicaid spending make up another 25%. Together these entitlement programs account for most of the future growth in spending, not including interest payments on debt, says MacGuineas.

The surge in Social Security spending is chiefly driven by the aging of the U.S. population. The leading edge of the baby-boom generation of 75 million began heading into retirement just as Obama took office. Back in 2009, the nation’s worker-to-retiree ratio stood at 3.0 to 1. Today, with more boomers having exited the workforce, the ratio has dropped to 2.8 to 1, and by 2035 it is projected to shrink to 2.1 to 1.

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Posted in * Culture-Watch, * Economics, Politics, Aging / the Elderly, Anthropology, Economy, Ethics / Moral Theology, Health & Medicine, Pastoral Theology, Politics in General, Social Security, The U.S. Government, Theology

(NYT Op-ed) Paul Volcker+ Peter Peterson–Ignoring the Debt Problem

Yes, this country can handle the nearly $600 billion federal deficit estimated for 2016. But the deficit has grown sharply this year, and will keep the national debt at about 75 percent of the gross domestic product, a ratio not seen since 1950, after the budget ballooned during World War II.

Long-term, that continued growth, driven by our tax and spending policies, will create the most significant fiscal challenge facing our country. The widely respected Congressional Budget Office has estimated that by midcentury our debt will rise to 140 percent of G.D.P., far above that in any previous era, even in times of war.

Unfortunately, despite a brief discussion during the final presidential debate, neither candidate has put forward a convincing plan to restrain the growth of the national debt in the decades to come.

Read it all. For a very important background on this, please see this 2011 post and the comments thereon, in which Boston University’s Laurence J. Kotlikoff makes clear that the true figure of our actual indebtedness is in excess of 200 Trillion dollars–KSH.

Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, America/U.S.A., Anthropology, Budget, Economy, Ethics / Moral Theology, History, Medicare, Politics in General, Social Security, The National Deficit, The U.S. Government, Theology

Peter Peterson Foundation–Have the Debt and Deficits Gotten Better?

But much more important is the steep upward trajectory of our long-term debt ”“ which remains as dangerous as ever. In its latest long-term outlook, released in June, CBO projected that the federal debt will climb to 141 percent of GDP by 2046 ”“ by far the highest level on record.

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Posted in * Culture-Watch, * Economics, Politics, Aging / the Elderly, Economy, Ethics / Moral Theology, Medicare, Politics in General, Psychology, Social Security, The National Deficit, The U.S. Government, Theology

Europe's robots to become 'electronic persons' under draft plan; owners will pay their Soc Sec

Europe’s growing army of robot workers could be classed as “electronic persons” and their owners liable to paying social security for them if the European Union adopts a draft plan to address the realities of a new industrial revolution.

Robots are being deployed in ever-greater numbers in factories and also taking on tasks such as personal care or surgery, raising fears over unemployment, wealth inequality and alienation.

Their growing intelligence, pervasiveness and autonomy requires rethinking everything from taxation to legal liability, a draft European Parliament motion, dated May 31, suggests.

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Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, Anthropology, Economy, Ethics / Moral Theology, Europe, Science & Technology, Social Security, The U.S. Government, Theology

(Gallup) 3 in 10 US Workers Foresee Working Past Retirement Age

In reality, however, many working Americans simply can’t afford to retire. Fewer workers today than in the past say a pension will be a major income source in retirement, and many have been unable to save sufficiently during the economic slowdown of the past decade. Seven in 10 employed adults told Gallup in April that they are worried about not having enough savings for retirement. As a result, they now need to work as long as possible to build up their retirement nest eggs.

At the moment, most workers are forgoing any thought of retiring before 62, the minimum age to receive partial Social Security retirement benefits, while nearly a third are planning to hold off until after age 67.

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Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, America/U.S.A., Anthropology, Economy, Ethics / Moral Theology, History, Labor/Labor Unions/Labor Market, Pensions, Personal Finance, Social Security, The U.S. Government, Theology

(CNBC) New retirement age is not 65, not 80, not 95: It's higher

Human life has reached an inflection point””one that matters a great deal for those planning for retirement.

One hundred years ago, the average lifespan was about 42. That’s now doubled. People are living longer and trying to stretch their income to make ends meet and stay ahead of inflation, but that’s not the inflection point financial advisors are really concerned about””that’s just the everyday blocking and tackling on behalf of client portfolios. The emerging challenge goes way beyond that.

Scientists have found the mechanisms that govern aging and are already doing experiments in rats on how to reverse it. They’ve found species that do not die of old age, such as the jellyfish Turritopsis.

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Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, Aging / the Elderly, America/U.S.A., Anthropology, Economy, Ethics / Moral Theology, Health & Medicine, Pastoral Theology, Personal Finance, Science & Technology, Social Security, The U.S. Government, Theology

(CNBC) Study: 41 percent expect no Social Security benefits

Americans have major doubts about the financial health of Social Security.

A new survey by Pew Research Center finds that 41 percent of Americans think there will be no Social Security benefits for them when they retire and nearly a third expect reduced levels of benefits. (Tweet This)

Some of those fears may be overblown. “People who think they will get zero benefits from Social Security are wrong and they should look at the facts,” said Andy Landis, a former claims representative for the Social Security Administration (SSA) and author of “Social Security: The Inside Story.”

There are concerns that benefits may be reduced, however.

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Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, Aging / the Elderly, America/U.S.A., Budget, Economy, Ethics / Moral Theology, Personal Finance, Politics in General, Psychology, Social Security, The U.S. Government, Theology

Today in 1935

Social Security Act is signed into law, assuring retirement income for all working Americans. Payroll taxes…are set at 1% (Courtesy of Barry Ritholtz)

Posted in * Culture-Watch, * Economics, Politics, Economy, History, Labor/Labor Unions/Labor Market, Social Security, Taxes, The U.S. Government

(IBD) Social Security To Go Bust By 2030: CBO

The $2.8 trillion Social Security Trust Fund is on track to be totally spent by 2030, the Congressional Budget Office said Tuesday.

That’s one year earlier than projected in 2013 and a decade earlier than the CBO estimated as recently as 2011.

The CBO delivered the warning in a gloomy long-term budget outlook that shows federal debt reaching 106% of GDP in 25 years, up from 74% now.

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Posted in * Culture-Watch, * Economics, Politics, Aging / the Elderly, Budget, Economy, Ethics / Moral Theology, Social Security, The National Deficit, The U.S. Government, Theology

Pew Research Reports important report on "the next America"

We start with this reality: Social Security and Medicare are practically sacrosanct. Nearly nine-in-ten Americans say they’re good for the country. That’s an amazing number. But the popularity of these programs really isn’t all that surprising. People love them because they do what they were created to do. They ease many of the frets and dreads of old age ”“ a blessing not just for seniors but for everyone who loves, supports and depends on seniors. Which is to say, everyone.

But the status quo is unsustainable. Some 10,000 Baby Boomers will be going on Social Security and Medicare every single day between now and 2030. By the time everyone in this big pig-in-the-python generation is drawing benefits, we’ll have just two workers per beneficiary ”“ down from three-to-one now, five-to-one in 1960 and more than forty-to-one in 1945, shortly after Social Security first started supporting beneficiaries.

The math of the 20th century simply won’t work in the 21st. Today’s young are paying taxes to support a level of benefits for today’s old that they have no realistic chance of receiving when they become old. And they know it ”“ just 6% of Millennials say they expect to receive full benefits from Social Security when they retire. Fully half believe they’ll get nothing.

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Posted in * Culture-Watch, * Economics, Politics, Aging / the Elderly, Budget, Economy, Ethics / Moral Theology, House of Representatives, Medicaid, Medicare, Office of the President, Politics in General, President Barack Obama, Senate, Social Security, The National Deficit, The U.S. Government, Theology, Young Adults

(NY Times) Treasury Secretary Sends Warning on Debt Limit

Treasury Secretary Jacob J. Lew warned Congress on Wednesday that the government would most likely exhaust its ability to borrow in late February, setting up yet another fiscal showdown with Republicans, and this time earlier than congressional leaders had anticipated.

In a letter to Speaker John A. Boehner and the other top three congressional leaders, Mr. Lew said a surge of February spending, mainly tax refunds for 2013, would leave the Treasury with little room to maneuver after the official debt limit is reached on Feb. 7.

The letter amounts to an early alarm bell, coming just weeks after Congress passed its first bipartisan budget and comprehensive spending bill in years. Those bills were supposed to serve as a cease-fire in the budget wars that have rattled the country and the economy since Republicans took control of the House in 2011.

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Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, America/U.S.A., Budget, Economy, Ethics / Moral Theology, Federal Reserve, Globalization, History, House of Representatives, Medicaid, Medicare, Office of the President, Politics in General, President Barack Obama, Senate, Social Security, Taxes, The National Deficit, The U.S. Government, The United States Currency (Dollar etc), Theology

(Gallup) Many Baby Boomers Reluctant to Retire

True to their “live to work” reputation, some baby boomers are digging in their heels at the workplace as they approach the traditional retirement age of 65. While the average age at which U.S. retirees say they retired has risen steadily from 57 to 61 in the past two decades, boomers — the youngest of whom will turn 50 this year — will likely extend it even further. Nearly half (49%) of boomers still working say they don’t expect to retire until they are 66 or older, including one in 10 who predict they will never retire.

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Posted in * Culture-Watch, * Economics, Politics, Aging / the Elderly, Anthropology, Economy, Ethics / Moral Theology, Labor/Labor Unions/Labor Market, Marriage & Family, Medicare, Middle Age, Pensions, Personal Finance, Politics in General, Psychology, Social Security, Stock Market, The U.S. Government, Theology

(Bloomberg) Illustrating a broad shift, at 61 She Lives in Basement While 87-Year-Old Dad Travels

While plenty of baby boomers, born from 1946 to 1964, have become affluent and many elderly around the U.S. face financial hardship, the wealth disparity of this father and daughter is emblematic of a broad shift occurring around the country. A rising tide of graying baby boomers is less secure financially and has a lower standard of living than their aged parents.

The median net worth for U.S. households headed by boomers aged 55 to 64 was almost 8 percent lower, at $143,964, than those 75 and older in 2011, according to Census Bureau data. Boomers lost more than other groups in the stock market and housing bust of 2008, and many also lost their jobs in the aftermath at a critical point in their productive years.

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Posted in * Culture-Watch, * Economics, Politics, Aging / the Elderly, Children, Economy, Housing/Real Estate Market, Labor/Labor Unions/Labor Market, Marriage & Family, Medicare, Middle Age, Pensions, Personal Finance, Psychology, Social Security, Stock Market, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The U.S. Government

(Washington Post) Robert Samuelson–The Latest Budget Deal is just more muddling through

But there’s a problem. [Charles] Lindblom’s common-sense insight has a giant exception: crises. Change, forced by outside events, then happens by “leaps and bounds.” The recent financial crisis caused Congress and two presidents to embrace measures (the rescue of big banks, General Motors and Chrysler) that were unthinkable a few months earlier. In the 1960s, civil rights demonstrations pushed Congress to pass the Civil Rights Act of 1964 that, in outlawing most public racial discrimination, wasn’t “incremental.” History offers other examples, including the Civil War, the New Deal and both World Wars. Small changes won’t suffice when big changes are required.

On the budget, muddling through comes with a crucial assumption. It is that continuous deficits won’t provoke a crisis that compels political leaders to take harsh steps that they would otherwise not take. This optimism may be justified. For decades, “experts” have warned of the dire consequences of unchecked deficits. Yet no great crisis has occurred. But this conviction also could be complacency. Government debt is in territory that, except for wartime debt, is unprecedented. We don’t know the consequences. Someday, we may no longer have the luxury of muddling through.

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Posted in * Culture-Watch, * Economics, Politics, Aging / the Elderly, Budget, Economy, Ethics / Moral Theology, House of Representatives, Medicare, Office of the President, Politics in General, President Barack Obama, Senate, Social Security, Taxes, The National Deficit, The U.S. Government, Theology, Young Adults

(Wash Post Op-ed) Robert Samuelson–We need to stop coddling the elderly

No one wants to be against Grandma, who ”” as portrayed in the media ”” is kindly, often suffering from some condition, usually financially precarious and somehow needy. But projecting this sympathetic portrait onto the entire 65-plus population is an exercise in make-believe and, frequently, political propaganda. The St. Louis Fed study refutes the stereotype. Examining different age groups, it found that since the financial crisis, incomes have risen for the elderly while they’ve dropped for the young and middle-aged.

The numbers are instructive. From 2007, the year before the financial crisis, to 2010, median income for the families under 40 dropped 12.4 percent to $39,644. For the middle-aged from 40 to 61, the comparable decline was 11.9 percent to $56,924. Meanwhile, those aged 62 to 69 gained 12.3 percent to $50,825. For Americans 70-plus, the increase was 15.6 percent to $31,512. (All figures adjust for inflation and are in 2010 “constant” dollars. The “median income” is the midpoint of incomes and is often considered “typical.”)

There has been a historic shift in favor of today’s elderly. To put this in perspective, recall that many family expenses drop with age. Mortgages are paid off; work costs vanish; children leave. Recall also that incomes typically follow a “life cycle”: They start low in workers’ 20s, peak in their 50s, and then decline in retirement, as wages give way to government transfers and savings. Against these realities, the long-term gains of the elderly and losses of the young are astonishing. From 1989 to 2010, median income increased 60 percent for those aged 62 to 69 while falling 6”‰percent for those under 40 and 2”‰percent for those 40 to 61.

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Posted in * Culture-Watch, * Economics, Politics, Aging / the Elderly, Budget, Economy, Health & Medicine, Medicare, Politics in General, Social Security, The National Deficit, The U.S. Government