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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
Duh
July 12, 2013 at 4:47 pm

Here's an idea: Don't rely on social security for your retirement funds. Live within your means and save money. Do you really NEED that tv? Do you really NEED cable? Do you really NEED new shoes?

Sincerely,
A growing cynic of the intelligence of people in general

Mary
July 12, 2013 at 4:07 pm

When I began working 50 years ago, and paying into Social Security, I was promised at 62 I could draw my retirement funds. WRONG I just don't get why everyone is talking about all this talking head numbers and dates and blah blah blah. It is what it is and no more hopefully no less. I took my Social Security at 66 so the government would not take the $1 for $2. but I will continue to work until I drop dead at my desk in order not to eat cat food and have health insurance. Saving money does not work either as we are not making any money on our money. Here I go Blah Blah Blah.

tolatola
July 12, 2013 at 2:24 pm

That's is why the federal goverment needs to get all those people stealing and frauding medicaid and medicare money. show their faces when they get caught, put them in jail for long time because they have been warned that this money is not a national cake, if you are caught, you will go to jail. But the system is too slow, they open all the home health agency like fire, every corner you will see lots of them, the agency given them the permit to open should make sure their finger printis taken to all their family because now they open them on their chiildren'S name if one investigated closed down. They called themselves young millioners among their friends, they are living in a million dollars houses, having twenty somthings differnce cars, houses uncountable,throwing thousand of party, spaying our money that goverment is taking out of everybody pay checks that is working or has worked before. The way this idiots are stealing, billing medicaid and medicare I said before that when is my time, your time to receive this money, the money will not be there for us again because of this people that came from other countrys that stealing goverment money is part of their fore-fathers heritage will come to American hoping to live a better life but instead come over here, frauding and living large like they always say. President Obama or any our former President do not have a millon dollars personal house but all those thieves do. America do not sleep, get this people they thought America people are dumbs and foolish. I encourage people to check into data base of the all home health agency and check who owns them, then you will see what I am talking about. I AM TALKING ABOUT BILLOINS OF DOLLARS ALREADY OUT OF THIS COUNTY TO THIS COUNTY WHEN ALL THIS IDIOTS COME FROM.

John Steyer
July 12, 2013 at 11:20 am

Unemployed 55 to 65 are already living off what remains of their life time savings, hoping to stay healthy with no health insurance for a few more years just to collect on a lifetime of taxed income... while illegals, fatty welfare folks, and government employees want us dead soon... before we can collect our SS. Some of us are too proud to collect food stamps, disability, or any hand outs at all... while still being charitable to others, volunteering for community services, and doing whatever minimum wage work to help put food on the table. The lazy and evil youth of our day wants their inheritance NOW ? We are a nation of thieves... look to where you already stole the money!

Fight Back
July 12, 2013 at 9:55 am

Talking or Crying about SS not going to get you anywhere, banding together and standing your ground pushing back doe more good. Who money is it illegals and people who never paid in or YOURS?

gabe braet
July 12, 2013 at 4:18 am

match cost of living to cost of housing an inmate in our prison system. this should increase taxes toward ss.

James Eckhoff
July 12, 2013 at 12:56 am

How about if one is receiving two pension checks that maybe a little over sixty-one thousand a year and has worked close to forty-four years and is at age sixty two years old.do I take a cut in social security at age sixty-two?

eppi ancono
July 11, 2013 at 9:56 pm

system needs a complete overhaul...Washington can start working on that ANYTIME!!!

marilyn crawford
July 11, 2013 at 9:50 pm

Sheesh, why not just give out his name and address.

vIRGINIA
July 11, 2013 at 9:43 pm

I know a guy that when he found out he was only getting 780 a month SS he claimed disability for his back. I have two compressed discs and implanted defibrlator and didnt claim disability. Plus he odd jobs around his neighbothood to supplement. to me thats SS fraud . I think they dont care who gets it. he cleaned a neighbors back yard real grunt work and itsour tax dollars boy did ss get the wool pulled over their eyes.