Social Insecurity

adequacy

I received my Social Security statement in the mail last week.  You know the one – it lists your earnings over your years of work and estimates what amount of Social Security you will be eligible for when you retire. 

At the rate that was quoted, I estimate I will be able to retire when I’m 87.  I’ll be living high on the hog, buying my denture cream and Depends.

That is, if Social Security survives.  The buzz in the financial world is that, by the time I’m ready to retire, there will be no “security” for me and others my age.  The idea that you’re paying into a fund that will be waiting for you when you need it most is, alas, just not true. 

The interesting thing is that this was the buzz 20+ years ago as well when I was at Michigan State.  I had a “Government Benefits for Workers” economics class that addressed this same problem.  I had to write a paper that solved this issue once and for all.  It was one of the very few things that I saved from my college years and I dusted it off and read it just this past week for giggles. 

My answer was to raise both taxes and the retirement age to 68 by the year 2000.   I called it a “trust fund”, optimistically believing that by demanding more money, the government would save it and there would be plenty to go around for years to come.  My professor loved it – I got an “A”.

What a heartless little politician I was back in 1987.  Not only was I going to make people work longer (life expectancy was going up, I rationalized), I was going to demand more money from workers. 

On second thought, people are working longer and I continue to pay lots of taxes.   Despite all this, it looks like me and my contemporaries are still not going to receive anything for all of our hard work and contributions. 

So, what’s the problem here?  Could it be massive spending by our government?  Mismanagement of funds?   People are just plain selfish and living too long?  All of the above?

I should save all of those Social Security statements and pull them out in 20 years.  Like that paper I wrote, they will seem nostalgic worth reading for a good laugh.

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