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Social Security — more for less

By Jennie L. Phipps · Bankrate.com
Tuesday, February 26, 2013
Posted: 6 pm ET

Thomas Saving, a professor of economics at Texas A&M University and director of its Private Enterprise Research Center, offers some startling retirement planning statistics.

His analysis of Social Security data shows that men with top earnings -- the highest 10 percent -- are living much longer than they used to. Their life expectancy past age 65 has increased six years in the last three decades. That has led many people -- including some in powerful places -- to think we ought to raise the age of eligibility for Social Security.

But Saving says this ignores the fact that over the past 30 years, life expectancy beyond age 65 for men with below-average incomes has only risen a single year. If the age of Social Security eligibility goes up, then men with low incomes who die at younger ages will get less from Social Security than people who live longer and have a longer time to collect.

Social Security was never envisioned to be a retirement plan, Saving says. From the very beginning, people who earned less and paid in less got a larger percentage back than people who earned more and paid in more. "(Former President Franklin D.) Roosevelt called what people put into the system 'contributions.' No doubt about it, it's a redistributive plan," says Saving, who is himself 79 and personally familiar with how Social Security works.

In a paper written for the National Center for Policy Analysis, a public policy research organization, Saving suggests that if the decision is made to raise the age of Social Security eligibility, then the benefit formula should be changed so that high earners get a still lower percentage return on the money they pay in while lower earners get a better return than they are getting now.

However it is done, Saving believes the Social Security system has to be adjusted to reflect longevity in order to make the system solvent. "Otherwise, we're looking at two workers for every retiree, and the tax is going to have to be 25 percent," he says.

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65 Comments
Clayton
February 27, 2013 at 6:05 pm

I guess since I referenced bank bailouts you wouldn't post my comment.

david
February 27, 2013 at 5:57 pm

The government has been STEALING our Social Security for years!and they also give it to people who don't put in to it.We could fix our SS IN THE BLINK OF AN EYE.We give 49 Billion a year away in foren aid to countrys that HATE US.WHY???????????

Kristina Lindgren
February 27, 2013 at 5:42 pm

One word...

DUH!!!

fishn 4 info
February 27, 2013 at 5:40 pm

the age statistic is is total propaganda as well, based on immigration and sensus material with no descretion. here is a good fact not usually shared. the average male that retires at age 62 "hard working male" draws 18 checks, yep 1 and a half years.

fishn 4 info
February 27, 2013 at 5:28 pm

it would cheat all those who work themselves to death and dont make it... we all should have the ability to draw ssi,im talking about legal citizens who contributed, the ones who have worked hard all there lives, they should even be allowed periodic vacations with the ability to draw from time to time, to enjoy there qaulity of life in youth also..

Paul
February 27, 2013 at 5:25 pm

I love you guys, said just like it should be... No money payed in.. No money payed out.

Chuck
February 27, 2013 at 5:02 pm

I agree with Toni. Thank Jimmy Carter for bringing all the Asains here and allowing them and probably many other non citizens that never paid in to SS to draw benefits at 65.

Grace
February 27, 2013 at 5:01 pm

I have watched the amount I will receive if I ever retire shrink and shrink each year. You tell me who can live and be healthy on less than $500 a month. I see my golden years turning to rust!
I worked since I was 12 and paid in since I was 15. This is not what I ever thought it would be and it is something that I for one really feel cheated out of.

jim
February 27, 2013 at 4:58 pm

The rich don't care, and the poor can't fight back, thx obama for that! neptism, and phony white house hypocrits!

Leslie
February 27, 2013 at 4:57 pm

I get all upset about this topic. 15.3% of every dollar I earn is put into Social Security and Medicare. My employer and I have paid this my entire working life. Over an average life time for a person who makes about 50K that is over 350,000. Plus there would be interest and earning etc. I get upset because this is
not some handout because I became a burden to society. It is not Goverment money. It is my money paid in to make sure I have some income when I am older. HOW DARE the goverment spend it on
non-americans and put any of it in the general fund with out my permission.