Retirement Blog

Finance Blogs » Retirement » Taking aim at Social Security

Taking aim at Social Security

By Jennie L. Phipps · Bankrate.com
Wednesday, November 7, 2012
Posted: 5 pm ET

Now that the election is decided, President Barack Obama and Congress are faced with the fiscal cliff. Social Security, which accounts for 20 percent of the U.S. budget, is the big target on the edge of that cliff.

The program's defenders are lining up to do battle.

Social Security Works, a coalition that urges increases in the program and fights cuts, has launched what it calls The Lame Duck Whip Count, which is keeping track of how members of Congress stand on cuts to Social Security, Medicare and Medicaid.

The number of members of the Republican-controlled House of Representatives who support this stance is unclear, but so far, nearly 30 mostly Democratic senators are on the Whip Count no-cuts list. At an early morning, post-election news conference calling for a quick fiscal cliff fix, Senate Majority Leader Harry Reid said, "We are not going to mess with Social Security."

Vermont Sen. Bernie Sanders, an Independent, is circulating an online petition at SignOn.org that calls for no benefit cuts to Social Security, Medicare and Medicaid. He already has nearly 100,000 electronic signatures -- and his effort has only just begun.

Social Security actuaries conclude that if we don't do something to control the cost of Social Security, by 2033, the program will only be collecting enough money to pay 75 percent of benefits owed. It may not look like it, but the political will to fix this problem is actually increasing, says Alison Borland, vice president of retirement solutions and strategies at human resources consultancy Aon Hewitt. But Borland doesn't see the fixes affecting people living in retirement or nearing it.

"There are easier things to stomach that impact people who are retiring 20, 30 or 40 years from now," she says.

She thinks that tax-saving tweaks to retirement savings plans such as IRAs and 401(k)s are more likely. Those changes could include eliminating some of the tax-deferred retirement plans, leaving only some version of a 401(k), probably a Roth 401(k) because it pushes the tax savings down the road. She also believes that it is likely that high-income earners will lose the ability to deduct much of their retirement savings.

In return, she predicts retirement planning will become more flexible with savers able to invest in a wider variety of options. "I think there is broad appreciation and recognition that retirement security is incredibly important, and you can expect the trade-off to any cuts to be a focus on getting more results from our investments," she says.

«
»
Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.
81 Comments
Rich Gardner
November 15, 2012 at 2:42 pm

If the politicians were made to give up their lavish retirement and go on SS it would get fixed in a hurry. As for Jim add in compound interest for 40 years like u could get form any savings account and
I bet your numbers would be different. The problem is that we have the best government that money can buy. Its past party lines. Toss them all.

Retired worker
November 15, 2012 at 1:11 pm

The down fall of SS funds started with President Johnson not admitting about the true cost of the Vietnam war. The powers that be elected to Congress to serve their constituents decided to "borrow" money from the fund and the rest is history.

Everyone should understand that when SS was introduced the age or retirement was 65_____ and the average American died at age 61!

What I fail to understand is why several ex spouses can get benefits even if they never worked a day much less pay any SS tax ever? All that was required was to "stay married at least 10 years" then they could collect spousal benefits for life. Seems there should be a limit to one ex spouse.

hammer44
November 15, 2012 at 12:36 pm

PLEASE don"t mess with ss.

Jody Wandell
November 13, 2012 at 4:38 pm

Social Security disability is a disgrace--I have people in my family on it and there is NOTHING wrong with them--they are bleeding the system and we are paying for it. Why isn't the govt hiring investigators to look into this. Some people on SS Disability should be on it legitimately but there are more on it that are faking disabilities. Disgraceful.

pete1427
November 11, 2012 at 2:55 pm

Over 20% of our current national debt are funds that the
legislature opted to borrow (should read steal)from the
Social Security Trust Fund. The problem is that when
the legislatures and presidents opted to borrow those
funds, there was NO mandate to repay those borrowed funds.
The majority of the Trust is actually IOUs with no date
for repayment.

Those borrowed funds would have kept the Social Security
viable for at least several more decades.
Legislatures should have left that trust fund intact.

The legislatures should also remember that senior
citizens constitute one of the largest voting blocks,
and we DO vote.
It is not an idle threat, but a promise that any
legislature that votes to mess with Social Security
payments will not be reelected.

Bob Tyler
November 11, 2012 at 1:34 pm

The United States Government have used our money for wars..welfare..and illegals in this country for years without ever asking and now they call it an intitlement...They never have paid back any money taken from this fund..Carter brought all the Mongs here and gave them full Social Security while people who worked here all their lives get less..The Congress gives themselves raises from it and the Senate does the same so much Government waste..Stop giving money to the world and take care of America...While there is a Country left, let the world fight its own battles..Take care of America and our people first.

Mitchell Kidd Sr.
November 11, 2012 at 12:23 pm

SOCIAL SECURITY WAS A TRUST FUND FOR THE PERSON WHO PAID INTO HIS OR HER ACCOUNT THAT IS WHY WE HAVE SOCIAL SECURITY CARDS

THE PEOPLE WHO HAVE PAID INTO THIS ACCOUNT SHOULD BE FILEING A ANTITRUST SUIT AGAINST THE PEOPLE WHO VIOLATED THIS
TRUST. THERE WAS SURPLUS MONEY IN THESE ACCOUNTS UNTIL THE
POLITCIANS DECIDED IT WAS THIER MONEY AND ROBBED THESE ACCOUNTS
SO LET US DO WHAT SHOULD HAVE BEEN DONE YEARS AGO AND
FILE A CIVIL SUIT TO RECLAIM OUR MONEY FROM THE OVER
PAID POLITTCIANS WHO HELP STEAL OUR MONEY

SOCIAL SECURITY IS NOT AN INTITLEMENT

Jim
November 11, 2012 at 12:00 pm

People that paid into the social security trust fund for 40 plus years actually receive back ALL of the money that they paid into the social security trust fund within the first 3 years of receiving the monthly annuity. Without a reduction to benefits being paid out, the system will go BANKRUPT. I vote to pay back every penny that an annuitant paid into the system within 3 years, and then reduce the benefit based on an income/earnings test. There are many social security beneficiaries also receiving pensions. Those who do not should continue to receive a SS benefit, but it shooud be reduced after they get back what they paid into the system.

kenwayne
November 11, 2012 at 11:55 am

I am on SSD because of a traffic accident that included brain injury. Yes I can do a lot of things and have tried to work a number of places but left go only because I cannot do things fast enough for the employers. Financially I cannot start a business of my own. It would be great to have a position that allows for disabilities and still pays wages that are up to the standards of this economy.

Kraig Miller
November 11, 2012 at 11:44 am

kmil

I have worked over 40 years and paid into Social Security and earned my money. I did not decide to provide SS funds to people who have not earned it and have filed false disabiltiy claims to recieve funds. Since the mid 60's when the government decide too put SS in the general fund it has used SS as it personel bank. If they would reimburse SS it would not be in danger of becoming insolvent. While our elected officials depend on the hardworking tax payer for there retiremenent they have no vested interest in keeping SS intact