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No more Social Security at 62?

By Jennie L. Phipps · Bankrate.com
Sunday, June 2, 2013
Posted: 7 am ET

The Social Security Board of Trustees released its annual report Friday on the financial health of both the retirement and the disability trust funds.

The report projected that the retirement trust fund will be depleted in 2033 -- unchanged from last year's projection. It said that unless Congress acts, at that point the program will be able to pay only 77 percent of promised benefits from ongoing contributions. The disability trust fund will be depleted much sooner -- in 2016 -- when the program will be able to pay only 80 percent of promised benefits.

Other statistics from the report that you might find interesting include:

  • More than 57 million people were receiving Social Security by the end of 2012.
  • In 2012, approximately 161 million people paid payroll taxes on earnings covered by Social Security.
  • The total money held in reserve by the program rose by $54 billion in 2012 to $2.73 trillion.
  • The cost to administer the program in 2012 was 0.8 percent of total expenditures, a total of $6.3 billion.

A few days prior to this announcement, Donald Fuerst, senior pension fellow at the American Academy of Actuaries, testified before the U.S. Congress about Social Security's pending shortfalls. He said that in 1940, when the new Social Security Administration began paying monthly retired-worker benefits, the retirement age was 65. At that time, workers who survived to age 65 had a remaining life expectancy of 12.7 years for men and 14.7 years for women. By 2011, life expectancy at age 65 was 18.7 years for men and 20.7 years for women, an increase of six full years for both.

What you should know about social security benefitsIn 20 more years, life expectancy at age 65 for men is expected to be more than 20 years and more than 22 years for women, Fuerst pointed out.

The bottom line: If something doesn't change, we won't have enough money to pay the Social Security that is promised, a retirement planning disaster.

Fuerst offered Congress several suggestions for fixing this problem. His most controversial idea is probably raising the minimum age for collecting Social Security from 62 to at least 64.

Here's what he'd also do to make an increase in retirement ages less painful for workers:

  • Gradually phase in any change over an extended period of years, even decades, to allow for more time for society to adapt to the new work-life reality. "Give people time to plan and prepare. You wouldn't want to change it for someone who was planning to retire the next year. None of us would consider that fair," Fuerst says.
  • Reduce benefits for higher-paid workers. "Wealthier socioeconomic groups recently show more longevity improvements than poorer socioeconomic groups," Fuerst points out.
  • Revise the Social Security disability program. Make the requirements more lenient for people between ages 62 and full retirement age, so those in occupations that involve physical labor wouldn't have to continue to work at jobs they couldn't physically do.
  • Cut or eliminate the wage tax for both employers and employees for people between ages 62 and full retirement age. It would give an incentive to both groups to keep older workers on the job.

Will a plan this complex and drastic ever wend its way through Congress? Fuerst thinks it should, but he isn't optimistic. "It isn't going to be easy; there are too many competing interests," he says.

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1,722 Comments
Ralph Morse
July 11, 2013 at 1:38 pm

If only 47% of Americans work full time, how are they suppose to pay for the 100% who want to draw SS? If you work hard and you save for your retirement should you then be elegible for less SS because other people did not work or save? If we were allowed to take care of our own money to invest as we see fit instead of mandatory payroll deductions for those of us 47% who work and nothing required of those who do not we could gauantee our own retirement. Those who do not work or save are the product of there own decision making. We pay people to have children out of wedlock, we pay people to not work, we do not force able bodied people to move to where the jobs are and allow them to live off of us where they want. Free medical, free dental, free housing,free food, free fuel and electric. There is no such thing for the 47% who work. SS SHOULD ONLY BE PAID FOR THOSE WHO PAID INTO IT PERIOD.FOR THOSE WHO DID NOT OR PAID VERY LITTLE...WELFARE IS DOWN THE HALL.

doda
July 11, 2013 at 11:45 am

how would this work.
Fund the SS appropriately in a separate account.

No funds will be taken out by the House, if any is taken and not paid back with interest then all the House will pay back with interest be it willingly or garnishment. Get them hustling with car washes, selling lemonade and all that.

Rebecca S
July 11, 2013 at 9:48 am

If the government/personnel/dept, is taking money paid by AMERICANS, and spending it for other uses, isn't that like stealing from a local high school athlete fund? People who take money that is not theirs, isn't that stealing?
OMG!!!!!!
I want to keep my money for SS and put in my own savings account....NOW!!!!!

So, we all are sitting by while this atrocity is happening!!!!!!
I have worked my whole life and I am an American.
IT is not right thieves will steal my hard earned money and get by with it....
I am way tired of immigrants, who paid nothing, stealing my $$$$.

Where is a petition we all can sign? Who can we all write to?

john l. luquette
July 11, 2013 at 9:28 am

i h ave paid my dues. at 80 i should collect my dues. whatis my payments supposed to be?

Laurn
July 11, 2013 at 12:51 am

Folks don't panic! The safety net is fine .However the bankers, trust fund managers and their lobbyist's are stirring the pot and making statements that are flat out lies. All the while hoping WE THE PEOPLE will become WE THE SHEEPLE and let them destroy the best handled program ever in the U.S. Just keep an eye out for the so called people's reps that bleat what their true masters want them to say and vote them out! Don't let the judas iscarius of our representative government make you a hater or a apathetic drone. It's what they want! They've hated SSI since it's inception and work tirelessly for it's overthrow.

Sandy Velez
July 11, 2013 at 12:27 am

Unbelievable that while we keep working and contributing to the SS for our retirement, the government does not fund this entity for the people that really pay taxes and contribute to this society. Instead, they keep funding the welfare program for people that do not have intension to work and keep cheating on their income in order to get all kind of benefits from the government like ( Session 8, food stamps, Cellphone and so on). Congress needs to work ASAP on this matter…

Nonya
July 10, 2013 at 11:11 pm

Stop giving Social security to people that haven't paid any social security taxes. I'm referring specifically to illegal immigrants, and not the disabled. If people earned wages that social security taxes were withheld from, then they should be entitled to compensation in the form of a monthly check from Social Security. If they did not work and did not pay any social security taxes, then they should not be entitled to any monies, unless they are a physically or mentally disabled American.

More importantly, remove the legislation that excuses those in government from being prosecuted for breach of fiduciary duty, and the people of America will quickly see the gov. stop using Soc. Sec. trust fund for anything but that which it was meant to be used for.

Fred Maier
July 10, 2013 at 7:23 pm

Social Security is here to stay. Minor adjustments can be made to keep the program solvent. Shouldn't the treasury pay interest on the money it has from social security, thereby improving the solvency of the program?

Neal Tullis
July 10, 2013 at 7:02 pm

Working Americans have paid in Social Security . The government says Social Security will run out by 2033 . Its funny , We keep adding people to the welfare roll and the other free hand outs . Now How much of this welfare and free handouts is being given to Illegals , who has broken our laws . Why is it , that the working Americans seems penalized , where as the free loaders and Illegals , doesnt have a worry , as it seems theirs plenty of money for that. The money given to Big Businesses , thats went bankrupt after a year , with American paying the Bill . No one is held accountable. The Muslins are a threat to Americans , and yet they are allowed to grow in numbers in this country . Thats kinda like putting Dogs and Cats in the same pen .

john doe
July 10, 2013 at 6:46 pm

to the comment that RR started the robbing of the SS turst fund get your facts staight it was Pres Johnson who open up the SS trust to the general fund for goverenment to rob us blind. Check your history it is always the dems that rob us to pay for their social programs