I’ve played on this field before, but the other day I received my annual Social Security statement. While they didn’t have my 2007 numbers figured out yet, I can safely say that over the course of my working life the government has confiscated over $40,000 of my money (along with a like amount from the several employers I’ve been with along the way) for Social Security and about $10,000 from each of us for Medicare. For all this, they calculate that if I should retire at the age of 62 (about 18 years hence) I’d get $1,259 per month.
The boilerplate letter I got talks “about Social Security’s future” as well, noting that, “(i)n 2017, we will begin paying more in benefits than we collect in taxes. Without changes, by 2041 the Social Security Trust Fund will be exhausted and there will only be enough money to pay about 78 cents per dollar of scheduled benefits.” So when I turn 77 I’m really going to be caught short, which may explain why I’m not too secure about getting any of my money back. (In theory, it only takes me a couple years to get back what I put in – after that I’m on the dime of my kids and grandkids, as my parents are being paid for now by my brothers and I.)
Obviously I don’t know what the future will bring as far as either my income, my longevity, or what the government does with the money my employers and I chip in. But one does have to question the return on investment I’ll get and really ponder what my employers get from the deal. It’s something that doesn’t make a lot of headlines, but imagine the impact on businesses if Social Security was sunsetted as I’ve suggested. Certainly the additional capital would be helpful to any business who has employees and perhaps they can use the extra to entice workers by contributing more as a match to their private retirement plans.
My largest concern is just which generation gets stuck holding the bag on this nearly 75 year old Ponzi scheme. They’re going to be one upset bunch because they’ll be paying more and more to support a group who had the opportunity to address the problem but failed to do so. With the Boomers now advancing to an age where they’ll be cashing in on the generosity of Gen X’ers like myself, their incentive is gone and my generation is rapidly reaching a point where we’re getting too close to retirement to address the issue either. It may be the Millennial Generation (born after 1975) who blows up at the thought of supporting their elders through money confiscated from their labor.
While President Bush attempted to do a little bit about this problem by privatizing a small portion of the employee’s contribution, the outcry from the Democrats and AARP (but I repeat myself) forced Congress into inaction and the idea died. Instead, candidates this time around only intend to tinker around the edges a bit and possibly add another few years to the lifespan. In the meantime, I’ll continue to see these statements each year and grow more and more disillusioned about how that rapidly increasing figure is basically being thrown away instead of the pockets of both me and my employer.
