Atrios (aka ‘Duncan Black’) takes a well-earned victory lap in getting the idea of expanding Social Security payments in the mainstream political discussion–recently, all but two Senate Democrats voted to expand Social Security benefits. But what burns me up is all the money I (and my employer) put into 401(k)s, which, if I had put into Social Security–that is, treat it as if my payments in had been larger, would have essentially doubled my Social Security payments, even under the current system. In other words, if there had been a ‘private’ supplemental Social Security option–you can pay in more and get Social Security-level returns–I would have a very nice guaranteed pension.
Instead, I’m stuck with a 401(k) hooked up with shitty ‘brokerage’ fees that suck away a significant chunk of my savings, and, which if my retirement is timed poorly, could be worth much less than I planned (just ask someone who retired–or planned to–in 2008-9).
And, as an aside, various entities are predicting Social Security will be ‘insolvent’–that is, pay out more than the assets held by the Fund and payroll taxes–in twenty to thirty years. These same entities have been predicting this for over thirty years, and the Social Security Fund currently has assets–a surplus–of over $2 trillion.
We have a Social Security crisis, just not the one the Very Serious People say we do.
mikethemadbiologist
I would absolutely love the option of adding additional money into my social security account, especially if it is matched by my employer.
According to the SSA website, at the end of 2014 trust fund assets are in the neighborhood of $2.6 trillion (not billion as mentioned above).
Thanks for hitting this first.
http://www.ssa.gov/oact/STATS/table4a3.html
That 2.6 trillion is the problem: the Rethuglicans want to give it to their friends on Wall Street to gamble with.
And to repeat my favorite points about SS: it would be in the black forever if we just eliminated the cap and the US has it really easy: Japan’s elderly to working age population ratio is now higher than said ratio will ever be in the US, and Japan is (for now) doing just fine.
SS Trust Fund foie gras?
When FICA income no longer covers SS retirement outgo we will do one of three things: raise the FICA rate, raise the FICA cap or raise the income tax (or expand the deficit) to cash the Trust Fund bonds.
When the TF bonds run out (should keep one year of full replacement, not shortfall coverage — the statutory definition of solvency) we can easily make a rule that income tax will from then on will cover the FICA shortfall — easily because that’s what we would have been doing for a couple of decades prior.
Politically, cashing the TF bonds may be the most doubtful outcome because that would in effect reverse the cap: the bottom 50% would pay nothing, the top 10% would take the biggest hit. Most doubtful under today’s 1% rule politics anyway. Which doubtfulness makes today’s Trust Fund stuffing remind me of foie gras. 🙂