They have known the exact day it will run out for the last 30 plus years and it hasn't changed since the day I first heard this scare mongering nonsense.
It's completely fixable with minor tweaks, but scare mongering and not fixing anything are far more important to the media and anyone who relies on older voters.
Imagine if we didn't spend 50b pointlessly bombing Iran and instead had increased invested they into SSA. I wonder how many days that would have extended the belly up date. I wonder if we made investments like that back into our own people on the regular, what this country would look like.
Yes, it could have extended the line by a few days but the core issue is that program like this are structured like a pyramid scheme.
To sustain 1 retiree, you need around 2 working body's tax. To avoid the system collapsing, countries usually do one of two things: raise the tax to reduce the ratio needed, and raising the retirement age, the closer you get to 1:1 ratio. The more sustainable the program.
"Making investment back" sounds like a solution but it's not. The core issue is 3 fold: increased life expectancy, decreasing ratio of retiree and workforce, especially less kids making the can down the road even bigger, and push back against tax increase. It's a unbalanced equation.
It's impossible to know the exact date it will run out. People's earnings records change every year until they retire. People retire at different ages. People die. The time at which it becomes insolvent is an estimate, but it's a good estimate
They know exactly how many people are working and contributing, how long they've been doing it, the average when those people stop for each county in the US, they know how many will die, they have all the metrics. Exactly why they could say "Covid killed X many people vs the norm, even though we counted X-millions... It's X because we have specific data for normal deaths.
The data has always been there, it's always been available to them and they know exactly when it will happen because they have so much historical data to rely on.
You are confusing measuring with forecasting. No one can have any idea what those variables will be in the future, and also what inflation is, which is basically half the equation, because if there is high inflation that required large CoL adjustments the total running excess would just be made proportionately smaller to any ongoing deficit, causing the statutory trigger to cut benefits to occur sooner. And in fact the forecast does change over time.
What’s the point of you saying this? Of course no one can know the exact day and the exact numbers. But these metrics are extremely predictable and known.
Yeah, look at how many more younger people are getting early onset cancer. If more people die by 50 that will extend it. Maybe we can reverse the whole decline in smoking.
The goal all along was to erode public trust in Social Security by planting the rumor that "it won't be around for you when you retire." And thus those still paying into the system would no longer support it.
It's a purposeful disinfo campaign to start a feedback loop.
Social security is unsustainable in its current form, it either needs to cut benefits or increase revenue and tinkering at the edges won’t be close to enough. The problem isn’t the media reporting that, it’s that politicians don’t want to address the problem which is in part because any changes would be unpopular.
The easy solution: remove the cap. Right now, that cap is higher than most middle class people, but far, far lower than what anybody above that grade makes. So basically, middle class pays into social security their entire working lives, but higher earners only pay through a part of their year's income.
Remove the cap, and people who make more pay more in. No need to cut benefits.
Its "easy" practically but obviously very hard politically because SS has always been marketed as a sort of pension that you "pay into" and those payments are "yours" that people mistakenly believe actually exists in real reserves somewhere doing something to fund your benefits. So people get irrationally mad when you reveal the reality that its actually just a transfer of money from workers to retirees, because its emotionally scary to acknowledge there is nothing "backing it,"and there isn't actually any necessary connection between how much someone pays in and gets out. So its a combination of denial and a sense of someone coming for whats "yours" that make any completely obvious improvements like removing the cap, or limiting the benefit to high earners, extremely unpopular.
I’d rather them end social security now than increase the cap. I don’t want to pay it. I don’t expect it to be there. Old people are not entitled to my labor like a slave. They get enough. It’s not my problem they didn’t save when they were working. I really don’t care at all. They’re taking right out of the mouths my children. I could give them a better life if I weren’t saddled by taxation I see no benefit from.
100% Yes. It’s not a retirement plan. They should get rid of the payroll tax and raise the income tax. Make it a safety net for the truly destitute. Get rid of SS and put them on welfare. Wage earner taxes go down. And I can use that money for my own retirement and not someone else’s I have no responsibility towards. Taxing wages is awful.
The problem is the political difficulty. SS was structured the way it is to basically trick people into thinking it was benefiting therm. While if we proposed to make SS better, but it exposes it as welfare, then people probably wouldn't support it out of self interest (perceived, as there is cost to dealing with impoverished people either way). And so its the shitty welfare that was able to actually be passed vs the ideal program that couldn't.
Yes. I don’t want to pay it. I would happily remove it. I am not responsible for other people’s bad choices and my labor should not be taken and given to someone else they did not earn. Only the truly destitute should get anything to keep people housed and not starving. I hate paying for other people’s retirement. I don’t owe some random old person a damn thing. It’s generational theft. Fuck that.
If someone can't work due to health, related to age or not, that should be the criteria, not whether they are 70 or any other age. Many 70 yos are fully capable of supporting themselves and don't need to rob younger workers struggling to simply survive just to enhance an older person's retirement vacation.
You won't pay it unless you are earning over $170K a year. You are likely already not hitting the cap, statistically, and wouldn't if they increase it.
Who cares? I don’t want to pay it at all. It’s a flat tax on wages and makes US employees much less competitive and suppresses labor market because we have to pay this stupid fucking payroll tax.
Getting rid of it is solving my problem. My problem is a group of people are taking my wages for their own personal benefit so they don’t have to work.
Fine, don't participate in any social benefit. Roads, police, sidewalks, traffic control, stores (they all have to get licenses), markets, food that you didn't personally grow, etc. Water, electricity, internet. Bye!
You commented and deleted:
Guess you shouldn't use discourse failures to complain about logical fallacies.
If you lift the cap, would you give high income earners a higher social security benefit for their additional contributions? Even if you don’t, a very aggressive move, you’d still need to cut benefits for all new recipients by 7%.
The payout schedule would continue to be managed as it currently is. The whole point is to make it work for everybody. It's analogous to insurance - you want a good rate, then more people have to participate.
Eliminate taxable earnings base, so all earnings are subject to current payroll tax, with no credit to benefits (retain cap for benefit calculations) reduces the shortfall by 73%. So 27% of 28% reduction leaves about a 7% shortfall.
Increasing marginal tax rates by 12.4 percentage points for anyone making over $184,500 would be a huge move. Maybe it makes sense but it’s not nibbling around the edges, it’s not a 2 percentage point increase to the top marginal rate for couples making more than $450k or something.
This is very different from people's expectations. 45% say they are worried the program won't be around. Not that the program will only pay out 72% of earned benefits. That's a big difference in expectation vs reality.
Sure, I wouldn’t put that all on the media though, a lot of people don’t read articles and just go based on headlines. 28% is also understating the problem because that would require action be taken immediately and affecting people on the verge of retirement.
No, i understand that a 25-28% cut would solve things.
I also understand how politics works in democratic countries - people don't vote to remove privilege, and our defense industry runs our budget. Meaning the simple solution is something we know won't be taken, no matter who we vote for.
I think a third option to worry about would be that the program becomes means tested, and middle and high earners may no longer be eligible for benefits.
What if, and stay with me here, we chopped the defense budget in half and put that money into social security each year, in addition to what we already put into it via payroll taxes?
>many Americans now believe Social Security is going bankrupt
My professor for Investments in undergrad told us about the pending bankruptcy of social security. On the first day, first class of the semester, he showed us the chart and how it it will drop off a cliff around 2030/2040. That moment stuck with me for life and I think about this moment from time to time. As a result of that lecture, I knew from the beginning that SSI wont be anything I can count on. I thank this man for this lesson.
It's the same with the demographic cliff for universities which would accelerate around 2030. That was roughly 25 years ago. Long since predicted that the 2030s would be a ugly decade economically.
the problem fixes itself as boomers die out the highest drawing population is replaced with a smaller population, and millenials in their 40s-50s are at their highest earning years and start to overfund it, just like the boomers did during their 40s and 50s.
its actually exactly what the projections show, theres high likelyhood of an issue in the early 2030's because thats when the largest precent of boomers will be drawing and it progressively gets better from there as they die and are replaced with a smaller number of gen xers.
same with medicare costs.
this isn't a complicated thing, theres an average rate people put in and an average rate people receive that individual rate is not linked to a generations size, but the total amount they contribute of draw is. From a purely demographic point of view the healthiest social security should ever be in the us's history was when the boomers were in their 50s.
> Over the long term, CBO projects Social Security's cash shortfall (assuming full benefits are paid) will grow to 3.9 percent of taxable payroll (1.4 percent of GDP) by 2033, to 5.1 percent of payroll (1.7 percent of GDP) by 2050, to 6.8 percent of payroll (2.3 percent of GDP) by 2075, and to 7.4 percent of payroll (2.4 percent of GDP) by 2097.
You read this and concluded the problem will resolve itself?
alternatively you can just remove the income cap, let age flex up a few years over the next half century and let some portion go in even slightly risky assets and fix it, but the main point is, this next 10 years of ss is going to suck and then things will get better.
the us at least in the medium term is lucky they have a massive buldge of people going through the period of life where their incomes will increase over the next 30 years.
other countries in demographic decline have the same funding problems but no millenial generational bulge
Why does Make America Great Again never talk about returning the type of pension plans that provided a secure retirement for Americans? Is corporate greed so great that they don’t care about their employees?
That system has some benefits, but also a pile of downsides as well - for instance you're necessarily tied to an employer through the majority of your career which can severely limit career growth. You're also beholden to their financial security, so smaller companies face far more challenges than larger ones (you never hear about the deli clerk at the local family grocery retiring to a pension), set payout cadence means you're not able to direct any of that wealth as you see fit, and when you die early it's effectively a financial gift back to the company.
There's certainly improvements that can be made to the current system, including mandating employer contributions and reducing employee's ability to raid the funds, but the old days of pensions is often romanticized a bit beyond it's actual virtue.
Using late 1960’s as when America was great in some minds, 45 - 50 percent of private sector employees had pensions. Throw in government workers who mostly had pensions and that was 50% of workforce who had guaranteed income in addition to social security for their retirement. Median 401k balance at 65 is 95k. 4% rule gives you maybe 500/month depending of performance. Don’t think that’s a better deal.
Shortcomings of the current system certainly don't magically negate shortcomings of the prior one, rather than wanting to go back in time perhaps consider the policy points I mentioned as positive changes towards a retirement structure that's both more robust and flexible. Something like the Australian system can be used as a template here.
If you mandate employer contribution, they'll just hire fewer people (you're just adding costs) and/or lower salaries (if you dont believe me compare French labor laws/requirements and the difference in French salaries to US).
In the US if you want to pay someone 200k, the employer needs to pay (taxes, insurance, 401k match etc). The employer payroll taxes are mandatory (8-12k), the insurance is expected (12k) and the 401k match is variable - but 5% is common, so lets say 235k all in as a cost to the employer (employee comp + expenses).
In France if you want to pay someone 200k, the employer needs to pay 280k-300k for the employee comp + social contributions (range is 40-60% of salary is the expectation for social contributions).
So the same role offering the same salary costs the employer 23% more in france vs the US. The "cost" of that additional employer expense shows up in differing salary levels, which eats into what employers are willing to offer in that market (salaries in France get depressed as a result).
> If you mandate employer contribution, they'll just hire fewer people (you're just adding costs) and/or lower salaries (if you dont believe me compare French labor laws/requirements and the difference in French salaries to US).
I mean, yes that cost comes from somewhere. But it's currently already paid in the form of social security taxes, it's also not a bad thing - this is a behavioral structure lol.
Yes, pro worker policies that provide a social net not tied to one’s employment are not bad. And if cost of living is cheaper, you may not care if you have reduced wages.
In general, I agree with this- but many places I’ve worked I’ve seen benefits/other comp between 25% and 40% of pay. And at 200k- if you’re not getting equity, your match is likely better than 5%. Multiple friends making 150k get a 10% match and some get a match up to the legal limit bc this is a big tax advantage and a way to get $40k pre-tax.
In France, the pay and benefits paid out aren’t the only issue. They also have incredibly restrictive laws on firing and even hiring that can cost companies thousands per employee. The pro-worker policies drive up the costs more than just insurance, pension, etc.
Corpos offered pensions because of greed, not in spite of it.
Pensions were common in days when they were riddled with loopholes like overpromising underfunded pensions that would then be discharged in bankruptcy, convenient layoffs, and discrimination. Once those loopholes were killed, pensions entered a very, very fast decline.
My industry is one of the few that still often offers them and they're honestly not that special. The money isn't a gift, it effectively comes out of your income regardless, the question is whether you manage it or whether the company does.
Pensions started to die when corporations in 80’s took over funded pensions and paid off baseline benefits and then pocketed the rest. Surplus pension funds were also used as funds for takeovers and leveraged buyouts. Made possible by another Regan policy change that made this possible. Corporations took $ 17 billion from pension plans between 1980 and 1987 from 1400 plans.
I work for a firm the local entertainment unions formed in the 1950s, and serves their members. We get similar benefits, including a real, fully compliant and funded pension.
MAGAts are pro billionaire and anti labor rights. So they wouldn't support pension plans. They all believe that they too might be a billionaire, so the rights of the rentier class to cheat taxes, pay as little as possible, provide no employee benefits or health care or govt services and benefits is precisely what they vote for- they are against any policies that would redistribute wealth equitably.
People are angry for a reason. Wages are stagnant, pensions are disappearing, groceries are more expensive, housing is out of reach, and people feel like they are working harder for less every year.
Instead of fixing that, politicians and media figures keep people fighting each other. Race. Immigration. Urban vs rural. Left vs right. "Owning the libs." Calling everyone racist. Constant outrage. Constant blame.
Some of these issues are real and important. Racism is real. Discrimination is real. But a lot of the division gets used as bait to stop ordinary people from realizing they have the same problems.
Most people, whether they are conservative or progressive, want the same basic things:
Affordable housing
Lower food prices
Better wages
Stronger pensions
Good healthcare
Better schools
More support for families
Less poverty
Less corporate power over daily life
The people at the top benefit when everyone else is too busy blaming each other to notice who is actually gaining from the system staying exactly as it is.
If your life was getting better, if you could afford groceries, save for retirement, buy a home, and take care of your family, you would not need someone to blame.
The answer is not pretending racism or discrimination do not exist. The answer is staying focused on the issues that improve life for everyone.
Stay calm. Do not take the bait. Bring the conversation back to cost of living, wealth inequality, healthcare, pensions, housing, and wages.
That is how you build a coalition big enough to actually change something.
I'm aware, but there's also individual experiences that factor, like my own. I live in a top five highest cost of living city, so when you factor in housing costs especially and point to macro data and say it's not a problem because of what the data says then I may not agree with you. I live here because of career and family, not because it's affordable.
Because that actually assumes they want to make the situation better and are serious about results. They aren’t serious and have no real policy ideas of any kind.
Many police and firefighters still get that kind of pension. Usually available after thirty years, which means many retire in their early fifties. Meanwhile "full retirement" age for anyone on social security is 67, and benefits are likely to be cut in the future.
Also "public safety" pensions are often enhanced with tax benefits because many/most of them will suddenly become "disabled" shortly after retirement.
Of course many receiving these generous government-provided pensions are MAGA and opposed to government retirement plans and safety-nets for everyone else.... because it's sOciaLism!!
While cities struggle financially mostly due to these pensions being too generous. Several pensions have already collapsed for cities and been reduced in benefit for retirees because they aren’t sustainable.
No idea. The fund has been managed for years by some agency, with another auditing them regularly. It has around $11 billion in it, and they manage to keep it increasing.
No, they don't. This sub has essentially become a spillover from r/politics where you couldn't scrounge up a positive checking account by combining the entire lot of redditors. They all just come here to bitch about money and how unfair life is.
It's almost like theres a reason everyone moved to defined contribution vs defined benefit.
Its also why so much of public sector budgets in cities / states end up going to pensions (seriously look at the liability that California has on its balance sheet) which is wholly unserviceable by the projected revenues. California is facing a 1T budget issue if they cant figure out pension reform, and the only solution will be to aggressively raise taxes (in an already very high tax state).
Pensions just move risk from one entity (you the retiree) to a company (which may or may not be able to afford it, and if they cant goes bankrupt). This math also makes it rough when you have increasing lifespans with better medical care.
>California is facing a 1T budget issue if they cant figure out pension reform, and the only solution will be to aggressively raise taxes (in an already very high tax state).
Yep, someday our children will pay higher taxes in order to fund the "overtime" pay that a CHP officer clocked when he did a "double shift" and slept in his patrol car for eight hours, ten years ago.
Public pensions suffer from political choices to underfund them. Everyone wants services but not to pay for them. Also companies have a bigger percentage of American pie than in 1970’s.
We spend a lot on pensions, it’s actually just very hard to manage massive ongoing liabilities for someone who starts work at 20 can retire at 50 and die at 80. Espcially in blue states we continually add sweeteners and benefits to pensions - the big controversies in Chicago are around unions fighting for benefits the city cannot afford (even with massive increases in property taxes and chasing large employers out of downtown)
Companies have a bigger percentage of the American pie is a non sensical statement because Apple doesn’t pay for McDonald’s employees? Like how is this a meaningful statement?
The largest companies give equity to their employees
Pension Benefit Guaranty Corporation (PBGC) insurances pensions and is paid for by companies. What a lot of people don't realize though is as a pensioner, you are not guaranteed100% recovery if the company goes bankrupt and the pension does not have sufficient funds, PBGC caps your pension payments based on some complex calculations.
They're are many examples of pension obligation contributing to bankruptcies/financial trouble. Like Hostess Brands (2012), Auto industry (2008–2009), U.S. steel (1998 to 2003), US Postal Service (now), ...
And BTW, most government employee sponsored pensions are not in great shape either - "Government pension funds face a persistent, multi-trillion dollar shortfall, with a roughly $1.3–$1.4 trillion national funding gap as of 2025-2026, ..". 90% funding level is consider stable, the average is 74% with some states under 60% funded.
Because pensions are a bad idea. They don't actually provide a secure retirement. A 401k is the same thing, just controlled by the employee. So if you move companies, you keep it. And it lets the working class build intergenerational wealth.
Honestly I am 34 I don’t plan on retiring. I hate my life but I’m willing to try. My plan has always been and I’ve been very vocal about it is to live to 50 and see where things are.
? I mean dude this is just poor planning, perhaps combined with a lack of knowledge about what's actually possible.
If you manage to save and invest just $10k/yr and throw it into the s&p500, then in theory you'd be sitting on around $2million bucks at age 64. That's not nothing and should be enough to allow you to retire on.
> perhaps combined with a lack of knowledge about what's actually possible.
Perhaps you could be exhibiting a bit of lack of knowledge of what is currently happening. If we consider the person you're talking to a random, average American, then there is somewhere between a 57-67% chance that they live paycheck to paycheck. And if they live paycheck to paycheck-
> If you manage to save and invest just $10k/yr and throw it into the s&p500
That number may as well have a few more zeros behind it, as it's just as unachievable
Then they aren’t gains. When you pay those loans, the payments aren’t deductible. You can delay taxes when they are paper gains. That is important because in the “90% tax” days they could offset income with PAPER LOSSES. The net effect has been taxes on the wealthy increased.
Fewer workers and retirees are confident they will have enough money to live comfortably in retirement, according to a survey.
The survey found workers and retirees are concerned the government will make significant changes to the retirement system, and expressed declining confidence that Social Security and Medicare benefits would retain their value.
Many workers are struggling with debt, inflation and rising housing and health care costs, while retirees are increasingly worried about the future of Social Security and Medicare.
Been hearing Social Security will be gone by the time I'm eligible for like 30 years. I feel like most of my generation is resigned to the fact we will be fucked over. Hard to be optimistic when everything keeps getting harder financially. I guess I'll just look forward to dying in the Water Wars.
2030-2035 is the latest projected date range for OASDI funds to be depleted. Payroll taxes should be sufficient to cover 73-83% of scheduled benefits.
So, there are a few options:
Benefits will be cut. Figure 19-27% immediate reduction in payments. These cuts will be automatic under existing statute.
Congress will take action and will appropriate funds from the general fund to cover the shortfall. The issue here is that SSA pays out ~$1.6T/year (FY25 numbers). This works out to $304B-$432B/year in increased spending. This will either have to come from reduced spending elsewhere or taking on further debt.
Interestingly, George W. Bush made social security reform a central issue since he first ran for office in the 1970s. It was known even then that the current path was unsustainable. In particular because the law requires that all SSA funds be “invested” in government backed bonds. Those pay a significantly lower rate, typically below even inflation. Consequently, the trust funds lose every year.
The proposed solution in the early 2000s was for a portion of SSA withholdings (for younger workers only) would be investable in the markets. The proposal then was that any gains would be kept in perpetuity. It was a pretty interesting idea.
Other nations (and US states) have opted to use funds, including pension funds, as covering wealth funds. They are invested in the markets and gain in value. Norway is the most famous.
Btw, if the US had indexed to the S&P, or just simply matched performance, since 1957 the trust fund balance would be sitting at $11.3T as opposed to $2.7T.
By way of reference, Norway’s fund is estimated to have assets of $2.1-2.3T.
Imagine what the US could do with its financial means. Won’t happen because we are simply too divided. We’d all, collectively, prefer everything to collapse and burn before compromising for a better future.
You could look at the guaranteed pensions that defaulted and the government had to pick up for what could happen with SS invested in the stock market. Look at how many hedge funds have blown up. How many companies in the DOW that have gone bankrupt over the last 100 years.
The fear that you expressed is a large part of why there is a looming SSA crisis.
Yes, pensions can be mismanaged, underfunded, the company can go out of business, etc. That is the risk.
On the other hand, if the United Stated Federal Government goes tits up then we have much bigger issues. In other words, it won’t.
As is, the massive store of wealth from tax revenues is being eaten up by inflation and low interest, year after year, decade after decade. The ratio of workers paying into the system versus beneficiaries is sitting at ~2.7:1. This is down from 5.1:1 in 1960. By the early 2030s (less than four years away), that ratio will have fallen to ~2.2:1.
SSA is not a giant savings account where a person puts money away and then comes back to it later. Current payables are paid out with current revenue. Any excess is kept in the trust, but fundamentally it is not a complicated concept.
Imagine if you take all of your savings, all of your 401k, IRA, etc. and parked it for 20+ years. Between 2000-2024, inflation ran at an average of 4.91%; the SSA trust in that period earns an average of 3.94% in interest. Effectively, it lost money. And that is with transfer into the trust from the General Fund; without which the fund would lost out of several hundred billion in interest revenue.
Now game that same situation out for decades more. Every year your savings, your nest egg, your assets are worth less and less. Plus, you are having to draw on them. So your nest egg is being hit on both sides. That is what is happening with SSA.
The law states that the trust fund can only be invested in government backed treasuries. So, the government can borrow against the trust and then the trust receives interest. But, interest rates in federal debt is quite low, lower than inflation.
Using a portion of the fund would unlock significant potential. Instead of entrusting private equity to fund renewable energy, what sort of difference could a reasonable investment by the United States Sovereign Wealth Fund achieve? The US oil & gas market is approaching $1.6 trillion per year. Why not grab a slice of that? Why not invest in those industries and exert shareholder influence? Germany does it.
Why not allow a citizen to take a portion of their SSA taxes and pick from a list of investment options? The Thrift Savings Plan already exists for federal employees to invest their retirement savings.
The fear of failure is inviting failure. The longer we continue living in fear and failing to act out of fear the worst the remedy will be. We are on an unsustainable path and every citizen of any reasonable level of intelligence and awareness has known this for over 50 years. And yet, nothing has been done. Why? Fear.
Compromising for a better future means sacrificing for the greater good. Western culture is built on "me me me." It's land of the prisoner's dilemma.
This sub and reddit in general is full of complaints that are purely first world problems. That tells you everything you need to know about compromising for a better future.
I find myself shaking my head at the vitriol and doomsaying at how all is lost, all is the worst it could ever possibly ever be. How unredeemable it all is and so on.
Umm, I’ve seen thousands of kids with their limbs hacked off, left orphaned to starve to death…
We have quite a way to go before we get there. Believe me, it can get far worse and we can totally right the ship.
It was a terrible idea to invest SS in the market then and it is now. You misunderstand how SS works and the point of it.
Also, the US is divided for a good reason. One party is destroying the country and giving all the money to Billionaires. I'll leave it as an exercise for the reader as to which one.
Yes, let's all do that. Oh wait, we did. Productivity rose tremendously between 1975 and today- and the majority of profits went to the top 3% exactly as we wanted. We voted for that. And we will continue to vote to give all of the value of our work to our rentier class- this is America. We believe in billionaires not common good.
Every worker you mean?
Friends from China, japan, korea, germany, france, Spain all say to me that they abandoned the idea or retiring. With low birth rate and people living longer its gonna be impossible to support the pension
NEED to elect Dems to reinstitute limitations on excessive C-level pay, stock buyback, and I think even day trading by Wall Streeters. Corporate and Wall Street greed has become too excessive. It will also need to overturn citizens United..
VOTE BLUE !!
I’m 49. I’m cashing out my retirement accounts next year to pay off my mortgage. I’m tired of the stock market manipulation and I’ve completely lost hope that I’ll retire.
Until then, I’ll enjoy the quality of life I thought I’d be living by now.
if you just kinda project it out, gen x and gen alpha are going to feel the pinch.
SS is funded by current payers, the surplus in the fund is because the boomers were contributing not drawing, towards the end of the boomers life they will be using the max while the highest income group will be gen x which is much smaller, then milienials should start over funding it again since gen x is small and melenials are large, then alpha repeats what gen x went through and theres not a large bulge atm behind that.
at least for gen x when they're retiring and millenials are in their highest earning years, a small increase can fix it, gen alpha wont have that large buldge behind them
This sentiment will grow even more, especially with AI replacing most white collar jobs in the near future. Plenty of people will “retire,” but not voluntarily. They’ll have to seek blue collar work if they want to have any employment prospects. Unless you’re a high earner, there is no such thing as disposable income anymore. Anything below manager level will soon be gone.
As a 42y/o, I’m basically sure at this point I will be completely responsible for my own retirement. I think the idea of a government taking care of me for 30 years is kinda wild anyway.
I remember in my HS government and politics course, we had an entire chapter on the sovereign wealth funds of nations, of course the US’s social security funds were included in these discussions. The most sobering piece of this discussion was that social security basically will not exist after 2030. The account is going to 0, the silver wave will run it dry and there is nothing we can do to stop it without completely restructuring our tax system and really taxing the walthy. Well we all know that won’t happen, so that means there will be no money for retirement benefits by the time I’m retiring.
When I was listening to that, I basically told myself that I would need to be able to earn enough so that at the end of my career, I wouldn’t need social security or Medicare. It’s crazy how some things stick with you. I remember that lecture like it was yesterday.
I’m 36, I feel bad for Gen z and future generations. I know I’m probably not retiring until after 65. This is also counting that I’m “retiring” from active duty military service in 2 years.
Future generations may never retire. I guess this is another way for the government to funnel people to the military. “Want to retire give us 20+ years” and hope you don’t die before that’s over.
US workers voted for this so it is what it is. Some time ago, we had a say in how we should handle our spending and we decided to vote for some the stupidest policies known to man. Trickle down anyone? Unfortunately, it won’t impact the ones directly responsible but their kids and grand kids. We fumbled the greatest economy and potential known to man.
This is ultimately the problem with voters deciding economic matters. Everyone complains about how the wealthy wants to privatize profits and socialize losses. I don't disagree with that complaint but I think it's true of everyone. We all want to do that. It's just that for most of us it's not as consequential as it would be for a billionaire... until voting day.
remember to share your concerns and stop voting for the Republicans! the BBB is the single biggest threat to have come into existence which threatens social security and Medicare. Remember to 'thank' the right party for that gift of anxiety this fall. And good luck planning your retirement - you deserve a good retirement.
How is this an economics article? It’s a short regurgitation on a survey that is looking at sentiment without looking at the causes for that sentiment. Everyone knows people are worried about their retirement why are they? Is it media driven? Lack of facts? Etc.
Then there some callout about wanting a fixed income financial product (what does that have to do with SS?) and finally a random quote about a concept of a plan for individuals without a retirement account to get one backed by the government.
What happened to actual economic analysis? This article is barely even personal finance.
look_under | 10 days ago
After decades of the Media telling Americans Social Security is going bankrupt, many Americans now believe Social Security is going bankrupt
No one could have seen this coming
pkennedy | 10 days ago
They have known the exact day it will run out for the last 30 plus years and it hasn't changed since the day I first heard this scare mongering nonsense.
It's completely fixable with minor tweaks, but scare mongering and not fixing anything are far more important to the media and anyone who relies on older voters.
weristjonsnow | 10 days ago
Imagine if we didn't spend 50b pointlessly bombing Iran and instead had increased invested they into SSA. I wonder how many days that would have extended the belly up date. I wonder if we made investments like that back into our own people on the regular, what this country would look like.
doubagilga | 9 days ago
This is easy to imagine and calculate. It would extend the date by ten days.
MikuEmpowered | 9 days ago
This has nothing to do with wasting.
Yes, it could have extended the line by a few days but the core issue is that program like this are structured like a pyramid scheme.
To sustain 1 retiree, you need around 2 working body's tax. To avoid the system collapsing, countries usually do one of two things: raise the tax to reduce the ratio needed, and raising the retirement age, the closer you get to 1:1 ratio. The more sustainable the program.
"Making investment back" sounds like a solution but it's not. The core issue is 3 fold: increased life expectancy, decreasing ratio of retiree and workforce, especially less kids making the can down the road even bigger, and push back against tax increase. It's a unbalanced equation.
OddlyFactual1512 | 10 days ago
It's impossible to know the exact date it will run out. People's earnings records change every year until they retire. People retire at different ages. People die. The time at which it becomes insolvent is an estimate, but it's a good estimate
pkennedy | 10 days ago
They know exactly how many people are working and contributing, how long they've been doing it, the average when those people stop for each county in the US, they know how many will die, they have all the metrics. Exactly why they could say "Covid killed X many people vs the norm, even though we counted X-millions... It's X because we have specific data for normal deaths.
The data has always been there, it's always been available to them and they know exactly when it will happen because they have so much historical data to rely on.
Illustrious-Lime-878 | 10 days ago
You are confusing measuring with forecasting. No one can have any idea what those variables will be in the future, and also what inflation is, which is basically half the equation, because if there is high inflation that required large CoL adjustments the total running excess would just be made proportionately smaller to any ongoing deficit, causing the statutory trigger to cut benefits to occur sooner. And in fact the forecast does change over time.
EaseOk3940 | 9 days ago
What’s the point of you saying this? Of course no one can know the exact day and the exact numbers. But these metrics are extremely predictable and known.
Illustrious-Lime-878 | 9 days ago
That "They have know the exact day" is not true, unexpected events like inflation or changes in income could significantly accelerate the date.
OddlyFactual1512 | 10 days ago
Exactly?
espressocycle | 9 days ago
Yeah, look at how many more younger people are getting early onset cancer. If more people die by 50 that will extend it. Maybe we can reverse the whole decline in smoking.
HIASHELL247 | 10 days ago
That’s right. Lose hope. Don’t fight back.
throwaway00119 | 10 days ago
The goal all along was to erode public trust in Social Security by planting the rumor that "it won't be around for you when you retire." And thus those still paying into the system would no longer support it.
It's a purposeful disinfo campaign to start a feedback loop.
fec2245 | 10 days ago
Social security is unsustainable in its current form, it either needs to cut benefits or increase revenue and tinkering at the edges won’t be close to enough. The problem isn’t the media reporting that, it’s that politicians don’t want to address the problem which is in part because any changes would be unpopular.
the_red_scimitar | 10 days ago
The easy solution: remove the cap. Right now, that cap is higher than most middle class people, but far, far lower than what anybody above that grade makes. So basically, middle class pays into social security their entire working lives, but higher earners only pay through a part of their year's income.
Remove the cap, and people who make more pay more in. No need to cut benefits.
CompEng_101 | 9 days ago
>The easy solution: remove the cap.
That WAS the easy solution. Now, it would only cover 50% of the shortfall gap. Maybe 68% if we remove the cap but also cap the maximum benefit.
It is still a good idea, but it won't solve the problem by itself.
https://www.crfb.org/socialsecurityreformer/
Illustrious-Lime-878 | 10 days ago
Its "easy" practically but obviously very hard politically because SS has always been marketed as a sort of pension that you "pay into" and those payments are "yours" that people mistakenly believe actually exists in real reserves somewhere doing something to fund your benefits. So people get irrationally mad when you reveal the reality that its actually just a transfer of money from workers to retirees, because its emotionally scary to acknowledge there is nothing "backing it,"and there isn't actually any necessary connection between how much someone pays in and gets out. So its a combination of denial and a sense of someone coming for whats "yours" that make any completely obvious improvements like removing the cap, or limiting the benefit to high earners, extremely unpopular.
MeanCryptographer585 | 10 days ago
I’d rather them end social security now than increase the cap. I don’t want to pay it. I don’t expect it to be there. Old people are not entitled to my labor like a slave. They get enough. It’s not my problem they didn’t save when they were working. I really don’t care at all. They’re taking right out of the mouths my children. I could give them a better life if I weren’t saddled by taxation I see no benefit from.
Illustrious-Lime-878 | 10 days ago
I agree, welfare should be based on critical need and not just arbitrary age or something.
MeanCryptographer585 | 9 days ago
100% Yes. It’s not a retirement plan. They should get rid of the payroll tax and raise the income tax. Make it a safety net for the truly destitute. Get rid of SS and put them on welfare. Wage earner taxes go down. And I can use that money for my own retirement and not someone else’s I have no responsibility towards. Taxing wages is awful.
Illustrious-Lime-878 | 9 days ago
The problem is the political difficulty. SS was structured the way it is to basically trick people into thinking it was benefiting therm. While if we proposed to make SS better, but it exposes it as welfare, then people probably wouldn't support it out of self interest (perceived, as there is cost to dealing with impoverished people either way). And so its the shitty welfare that was able to actually be passed vs the ideal program that couldn't.
the_red_scimitar | 9 days ago
So, after they spent decades destroying the existing net, the solution is to remove the rest.
MeanCryptographer585 | 9 days ago
Yes. I don’t want to pay it. I would happily remove it. I am not responsible for other people’s bad choices and my labor should not be taken and given to someone else they did not earn. Only the truly destitute should get anything to keep people housed and not starving. I hate paying for other people’s retirement. I don’t owe some random old person a damn thing. It’s generational theft. Fuck that.
the_red_scimitar | 9 days ago
So, you shouldn't take part in anything paid for by taxes. No roads or sidewalks for you.
the_red_scimitar | 9 days ago
You think 70+ people can work just like younger people?
Illustrious-Lime-878 | 9 days ago
If someone can't work due to health, related to age or not, that should be the criteria, not whether they are 70 or any other age. Many 70 yos are fully capable of supporting themselves and don't need to rob younger workers struggling to simply survive just to enhance an older person's retirement vacation.
the_red_scimitar | 9 days ago
You won't pay it unless you are earning over $170K a year. You are likely already not hitting the cap, statistically, and wouldn't if they increase it.
MeanCryptographer585 | 9 days ago
Who cares? I don’t want to pay it at all. It’s a flat tax on wages and makes US employees much less competitive and suppresses labor market because we have to pay this stupid fucking payroll tax.
the_red_scimitar | 9 days ago
So this isn't about solving it. Got it.
MeanCryptographer585 | 9 days ago
Getting rid of it is solving my problem. My problem is a group of people are taking my wages for their own personal benefit so they don’t have to work.
the_red_scimitar | 9 days ago
Fine, don't participate in any social benefit. Roads, police, sidewalks, traffic control, stores (they all have to get licenses), markets, food that you didn't personally grow, etc. Water, electricity, internet. Bye!
You commented and deleted:
Guess you shouldn't use discourse failures to complain about logical fallacies.
fec2245 | 10 days ago
If you lift the cap, would you give high income earners a higher social security benefit for their additional contributions? Even if you don’t, a very aggressive move, you’d still need to cut benefits for all new recipients by 7%.
the_red_scimitar | 10 days ago
The payout schedule would continue to be managed as it currently is. The whole point is to make it work for everybody. It's analogous to insurance - you want a good rate, then more people have to participate.
Could you show how you arrived at 7%?
fec2245 | 10 days ago
Eliminate taxable earnings base, so all earnings are subject to current payroll tax, with no credit to benefits (retain cap for benefit calculations) reduces the shortfall by 73%. So 27% of 28% reduction leaves about a 7% shortfall.
https://www.congress.gov/crs-product/RL32896#_Toc91507612
throwaway00119 | 10 days ago
"A very aggressive move" lmao. Uncapping SS is a "very aggressive move" ?
fec2245 | 10 days ago
Increasing marginal tax rates by 12.4 percentage points for anyone making over $184,500 would be a huge move. Maybe it makes sense but it’s not nibbling around the edges, it’s not a 2 percentage point increase to the top marginal rate for couples making more than $450k or something.
throwaway00119 | 10 days ago
As you said, nibbling around the edges doesn't make the math math.
Those contributing more will get an increase in their benefit. I'm not sure what's difficult to understand there.
fec2245 | 10 days ago
It’s a 7% cut if you don’t increase their benefits, higher if you do
Matt2_ASC | 10 days ago
How much would they have to cut benefits? I bet its a lot less than the right wing media makes it out to be.
fec2245 | 10 days ago
Assuming only current retirees aren’t affected, we’d need a 28% across the board cut but each year Congress does nothing that grows.
Matt2_ASC | 10 days ago
This is very different from people's expectations. 45% say they are worried the program won't be around. Not that the program will only pay out 72% of earned benefits. That's a big difference in expectation vs reality.
Is Social Security Going Away? Many Americans Are Worried | Money
fec2245 | 10 days ago
Sure, I wouldn’t put that all on the media though, a lot of people don’t read articles and just go based on headlines. 28% is also understating the problem because that would require action be taken immediately and affecting people on the verge of retirement.
fredjutsu | 10 days ago
No, i understand that a 25-28% cut would solve things.
I also understand how politics works in democratic countries - people don't vote to remove privilege, and our defense industry runs our budget. Meaning the simple solution is something we know won't be taken, no matter who we vote for.
Interesting-Card5803 | 10 days ago
I think a third option to worry about would be that the program becomes means tested, and middle and high earners may no longer be eligible for benefits.
Chemical-Fault-7331 | 10 days ago
What if, and stay with me here, we chopped the defense budget in half and put that money into social security each year, in addition to what we already put into it via payroll taxes?
StunningCloud9184 | 10 days ago
18% off.
L3g3ndary-08 | 10 days ago
>many Americans now believe Social Security is going bankrupt
My professor for Investments in undergrad told us about the pending bankruptcy of social security. On the first day, first class of the semester, he showed us the chart and how it it will drop off a cliff around 2030/2040. That moment stuck with me for life and I think about this moment from time to time. As a result of that lecture, I knew from the beginning that SSI wont be anything I can count on. I thank this man for this lesson.
Maxpowr9 | 9 days ago
It's the same with the demographic cliff for universities which would accelerate around 2030. That was roughly 25 years ago. Long since predicted that the 2030s would be a ugly decade economically.
guachi01 | 10 days ago
If Social Security is "going bankrupt" then the Department of Defense has been bankrupt for decades. It's a dumb argument.
El_Gran_Che | 9 days ago
And republicans rapidly accelerating that bankruptcy.
Healthy_Razzmatazz38 | 10 days ago
the problem fixes itself as boomers die out the highest drawing population is replaced with a smaller population, and millenials in their 40s-50s are at their highest earning years and start to overfund it, just like the boomers did during their 40s and 50s.
its gen alpha that will be left holding the bag
fec2245 | 10 days ago
That’s not at all what projections show
Healthy_Razzmatazz38 | 10 days ago
its actually exactly what the projections show, theres high likelyhood of an issue in the early 2030's because thats when the largest precent of boomers will be drawing and it progressively gets better from there as they die and are replaced with a smaller number of gen xers.
same with medicare costs.
this isn't a complicated thing, theres an average rate people put in and an average rate people receive that individual rate is not linked to a generations size, but the total amount they contribute of draw is. From a purely demographic point of view the healthiest social security should ever be in the us's history was when the boomers were in their 50s.
Which is exactly what happened.
fec2245 | 10 days ago
https://www.crfb.org/blogs/cbo-social-security-ten-years-insolvency
Healthy_Razzmatazz38 | 10 days ago
this matches exactly what i said, theres an issue in the 2030's that solves itself as boomers die off and millennials incomes continue to grow.
fec2245 | 10 days ago
> Over the long term, CBO projects Social Security's cash shortfall (assuming full benefits are paid) will grow to 3.9 percent of taxable payroll (1.4 percent of GDP) by 2033, to 5.1 percent of payroll (1.7 percent of GDP) by 2050, to 6.8 percent of payroll (2.3 percent of GDP) by 2075, and to 7.4 percent of payroll (2.4 percent of GDP) by 2097.
You read this and concluded the problem will resolve itself?
Healthy_Razzmatazz38 | 10 days ago
full benefits wont be paid, the article itself says they will be cut by 25% in 2030s due to the shortfall then recover from that cut point.
fec2245 | 10 days ago
Yes, cutting benefits sharply would fix the problem.
Healthy_Razzmatazz38 | 10 days ago
alternatively you can just remove the income cap, let age flex up a few years over the next half century and let some portion go in even slightly risky assets and fix it, but the main point is, this next 10 years of ss is going to suck and then things will get better.
the us at least in the medium term is lucky they have a massive buldge of people going through the period of life where their incomes will increase over the next 30 years.
other countries in demographic decline have the same funding problems but no millenial generational bulge
makemeking706 | 10 days ago
The problem is that they want to take those funds. It has nothing to do with cash flow or payments.
They want ALL of our assets.
Valianne11111 | 10 days ago
Gen Alpha is growing up with finance and investing taught from an early age.
onceinawhile222 | 10 days ago
Why does Make America Great Again never talk about returning the type of pension plans that provided a secure retirement for Americans? Is corporate greed so great that they don’t care about their employees?
JustaCog72 | 10 days ago
I know this was likely a rhetorical question, but the answer is definitely yes. Corporations are absolutely that greedy
onceinawhile222 | 10 days ago
Also a real question this was what supported middle class. Didn’t need to save 10% of income to have funding for your retirement.
RIP_Soulja_Slim | 10 days ago
That system has some benefits, but also a pile of downsides as well - for instance you're necessarily tied to an employer through the majority of your career which can severely limit career growth. You're also beholden to their financial security, so smaller companies face far more challenges than larger ones (you never hear about the deli clerk at the local family grocery retiring to a pension), set payout cadence means you're not able to direct any of that wealth as you see fit, and when you die early it's effectively a financial gift back to the company.
There's certainly improvements that can be made to the current system, including mandating employer contributions and reducing employee's ability to raid the funds, but the old days of pensions is often romanticized a bit beyond it's actual virtue.
onceinawhile222 | 10 days ago
Using late 1960’s as when America was great in some minds, 45 - 50 percent of private sector employees had pensions. Throw in government workers who mostly had pensions and that was 50% of workforce who had guaranteed income in addition to social security for their retirement. Median 401k balance at 65 is 95k. 4% rule gives you maybe 500/month depending of performance. Don’t think that’s a better deal.
Skittlepyscho | 10 days ago
The only reason why I maintain working for the government is for the pension benefits
RIP_Soulja_Slim | 10 days ago
Shortcomings of the current system certainly don't magically negate shortcomings of the prior one, rather than wanting to go back in time perhaps consider the policy points I mentioned as positive changes towards a retirement structure that's both more robust and flexible. Something like the Australian system can be used as a template here.
capnwally14 | 10 days ago
If you mandate employer contribution, they'll just hire fewer people (you're just adding costs) and/or lower salaries (if you dont believe me compare French labor laws/requirements and the difference in French salaries to US).
In the US if you want to pay someone 200k, the employer needs to pay (taxes, insurance, 401k match etc). The employer payroll taxes are mandatory (8-12k), the insurance is expected (12k) and the 401k match is variable - but 5% is common, so lets say 235k all in as a cost to the employer (employee comp + expenses).
In France if you want to pay someone 200k, the employer needs to pay 280k-300k for the employee comp + social contributions (range is 40-60% of salary is the expectation for social contributions).
So the same role offering the same salary costs the employer 23% more in france vs the US. The "cost" of that additional employer expense shows up in differing salary levels, which eats into what employers are willing to offer in that market (salaries in France get depressed as a result).
RIP_Soulja_Slim | 10 days ago
> If you mandate employer contribution, they'll just hire fewer people (you're just adding costs) and/or lower salaries (if you dont believe me compare French labor laws/requirements and the difference in French salaries to US).
I mean, yes that cost comes from somewhere. But it's currently already paid in the form of social security taxes, it's also not a bad thing - this is a behavioral structure lol.
ChampionshipDue5033 | 9 days ago
Yes, pro worker policies that provide a social net not tied to one’s employment are not bad. And if cost of living is cheaper, you may not care if you have reduced wages.
ChampionshipDue5033 | 9 days ago
In general, I agree with this- but many places I’ve worked I’ve seen benefits/other comp between 25% and 40% of pay. And at 200k- if you’re not getting equity, your match is likely better than 5%. Multiple friends making 150k get a 10% match and some get a match up to the legal limit bc this is a big tax advantage and a way to get $40k pre-tax.
In France, the pay and benefits paid out aren’t the only issue. They also have incredibly restrictive laws on firing and even hiring that can cost companies thousands per employee. The pro-worker policies drive up the costs more than just insurance, pension, etc.
Windows_10-Chan | 10 days ago
Corpos offered pensions because of greed, not in spite of it.
Pensions were common in days when they were riddled with loopholes like overpromising underfunded pensions that would then be discharged in bankruptcy, convenient layoffs, and discrimination. Once those loopholes were killed, pensions entered a very, very fast decline.
My industry is one of the few that still often offers them and they're honestly not that special. The money isn't a gift, it effectively comes out of your income regardless, the question is whether you manage it or whether the company does.
onceinawhile222 | 10 days ago
Pensions started to die when corporations in 80’s took over funded pensions and paid off baseline benefits and then pocketed the rest. Surplus pension funds were also used as funds for takeovers and leveraged buyouts. Made possible by another Regan policy change that made this possible. Corporations took $ 17 billion from pension plans between 1980 and 1987 from 1400 plans.
the_red_scimitar | 9 days ago
I work for a firm the local entertainment unions formed in the 1950s, and serves their members. We get similar benefits, including a real, fully compliant and funded pension.
LesnBOS | 10 days ago
MAGAts are pro billionaire and anti labor rights. So they wouldn't support pension plans. They all believe that they too might be a billionaire, so the rights of the rentier class to cheat taxes, pay as little as possible, provide no employee benefits or health care or govt services and benefits is precisely what they vote for- they are against any policies that would redistribute wealth equitably.
Thoughtulism | 10 days ago
People are angry for a reason. Wages are stagnant, pensions are disappearing, groceries are more expensive, housing is out of reach, and people feel like they are working harder for less every year.
Instead of fixing that, politicians and media figures keep people fighting each other. Race. Immigration. Urban vs rural. Left vs right. "Owning the libs." Calling everyone racist. Constant outrage. Constant blame.
Some of these issues are real and important. Racism is real. Discrimination is real. But a lot of the division gets used as bait to stop ordinary people from realizing they have the same problems.
Most people, whether they are conservative or progressive, want the same basic things:
The people at the top benefit when everyone else is too busy blaming each other to notice who is actually gaining from the system staying exactly as it is.
If your life was getting better, if you could afford groceries, save for retirement, buy a home, and take care of your family, you would not need someone to blame.
The answer is not pretending racism or discrimination do not exist. The answer is staying focused on the issues that improve life for everyone.
Stay calm. Do not take the bait. Bring the conversation back to cost of living, wealth inequality, healthcare, pensions, housing, and wages.
That is how you build a coalition big enough to actually change something.
throwaway00119 | 10 days ago
Speaking of taking the bait - did you know that real wages aren't stagnant?
I'm for everything else you say here and strongly agree - but leading off with something unactual hurts the rest of your comment.
Thoughtulism | 10 days ago
I'm aware, but there's also individual experiences that factor, like my own. I live in a top five highest cost of living city, so when you factor in housing costs especially and point to macro data and say it's not a problem because of what the data says then I may not agree with you. I live here because of career and family, not because it's affordable.
throwaway00119 | 10 days ago
That's called anecdotes and opportunity cost. I'm not sure using your personal choices as a line of fact wins you support.
Thoughtulism | 10 days ago
Anecdotal evidence is still evidence and can be responsible for changing people's decisions
throwaway00119 | 10 days ago
I'd go as far as to say the majority of people base their decisions and opinions on their anecdotal experience!
absurdamerica | 10 days ago
Because that actually assumes they want to make the situation better and are serious about results. They aren’t serious and have no real policy ideas of any kind.
Own-Chemist2228 | 10 days ago
Many police and firefighters still get that kind of pension. Usually available after thirty years, which means many retire in their early fifties. Meanwhile "full retirement" age for anyone on social security is 67, and benefits are likely to be cut in the future.
Also "public safety" pensions are often enhanced with tax benefits because many/most of them will suddenly become "disabled" shortly after retirement.
Of course many receiving these generous government-provided pensions are MAGA and opposed to government retirement plans and safety-nets for everyone else.... because it's sOciaLism!!
doubagilga | 9 days ago
While cities struggle financially mostly due to these pensions being too generous. Several pensions have already collapsed for cities and been reduced in benefit for retirees because they aren’t sustainable.
the_red_scimitar | 10 days ago
Because they want your money losing in the stock market through 401Ks.
throwaway00119 | 10 days ago
Do you know how pensions work?
the_red_scimitar | 9 days ago
I have a real pension AND a 401K. Do you know how both work?
throwaway00119 | 9 days ago
What does your pension invest in?
the_red_scimitar | 9 days ago
No idea. The fund has been managed for years by some agency, with another auditing them regularly. It has around $11 billion in it, and they manage to keep it increasing.
Rock-n-RollingStart | 9 days ago
No, they don't. This sub has essentially become a spillover from r/politics where you couldn't scrounge up a positive checking account by combining the entire lot of redditors. They all just come here to bitch about money and how unfair life is.
the_red_scimitar | 9 days ago
Do you always answer incorrectly for people you don't know?
Rock-n-RollingStart | 9 days ago
Do you think pensions are magically divorced from the stock market?
QED
the_red_scimitar | 9 days ago
Not only don't I, I literally said the opposite. Comprehension matters.
capnwally14 | 10 days ago
It's almost like theres a reason everyone moved to defined contribution vs defined benefit.
Its also why so much of public sector budgets in cities / states end up going to pensions (seriously look at the liability that California has on its balance sheet) which is wholly unserviceable by the projected revenues. California is facing a 1T budget issue if they cant figure out pension reform, and the only solution will be to aggressively raise taxes (in an already very high tax state).
Pensions just move risk from one entity (you the retiree) to a company (which may or may not be able to afford it, and if they cant goes bankrupt). This math also makes it rough when you have increasing lifespans with better medical care.
Own-Chemist2228 | 10 days ago
>California is facing a 1T budget issue if they cant figure out pension reform, and the only solution will be to aggressively raise taxes (in an already very high tax state).
Yep, someday our children will pay higher taxes in order to fund the "overtime" pay that a CHP officer clocked when he did a "double shift" and slept in his patrol car for eight hours, ten years ago.
onceinawhile222 | 10 days ago
Public pensions suffer from political choices to underfund them. Everyone wants services but not to pay for them. Also companies have a bigger percentage of American pie than in 1970’s.
capnwally14 | 10 days ago
We spend a lot on pensions, it’s actually just very hard to manage massive ongoing liabilities for someone who starts work at 20 can retire at 50 and die at 80. Espcially in blue states we continually add sweeteners and benefits to pensions - the big controversies in Chicago are around unions fighting for benefits the city cannot afford (even with massive increases in property taxes and chasing large employers out of downtown)
Companies have a bigger percentage of the American pie is a non sensical statement because Apple doesn’t pay for McDonald’s employees? Like how is this a meaningful statement?
The largest companies give equity to their employees
Key-Organization3158 | 10 days ago
But everyone is also getting more pie.
Pensions are an inherently flawed idea.
onceinawhile222 | 10 days ago
If that’s true why does upper management still receive them. And everyone may be getting more pie but the pie is bigger and their share is smaller.
edwwsw | 10 days ago
Pensions have their issues too.
American_PissAnt | 10 days ago
Because “making America great again” is not about making America great, but making minorities suffer.
smallcarbro | 10 days ago
They are broke people who cant even imagine retiring. They think deporting illegals will make them rich. Lol.
FlyingBishop | 10 days ago
Because MAGA is explicitly about making it so retirement is something that is not granted to everyone. Which people get it? well.
Accomplished-Mud3085 | 9 days ago
Pensions are not necessarily better. If the company goes bust, the PBGC only guarantees a small amount
Downtown_Skill | 9 days ago
Is corporate greed so great that they don't care about their employees?
I mean
Yes, isn't that obvious. They have been pretty transparent about it lately too.
Key-Organization3158 | 10 days ago
Because pensions are a bad idea. They don't actually provide a secure retirement. A 401k is the same thing, just controlled by the employee. So if you move companies, you keep it. And it lets the working class build intergenerational wealth.
onceinawhile222 | 10 days ago
Basic problem is how working class families fund them.
cjp2010 | 10 days ago
Honestly I am 34 I don’t plan on retiring. I hate my life but I’m willing to try. My plan has always been and I’ve been very vocal about it is to live to 50 and see where things are.
Vegetable_Good6866 | 10 days ago
I'm also 34 and and have had similar thoughts
Heffe3737 | 10 days ago
? I mean dude this is just poor planning, perhaps combined with a lack of knowledge about what's actually possible.
If you manage to save and invest just $10k/yr and throw it into the s&p500, then in theory you'd be sitting on around $2million bucks at age 64. That's not nothing and should be enough to allow you to retire on.
Lemp_Triscuit11 | 10 days ago
> perhaps combined with a lack of knowledge about what's actually possible.
Perhaps you could be exhibiting a bit of lack of knowledge of what is currently happening. If we consider the person you're talking to a random, average American, then there is somewhere between a 57-67% chance that they live paycheck to paycheck. And if they live paycheck to paycheck-
> If you manage to save and invest just $10k/yr and throw it into the s&p500
That number may as well have a few more zeros behind it, as it's just as unachievable
Beautychaos | 10 days ago
I personally don’t have an extra $833.33 to save monthly.
Brilliant-Block-8200 | 10 days ago
Exactly this. I’m lucky if I can save even $300 a month
Beautychaos | 9 days ago
I feel your pain!
Amerlis | 10 days ago
Yeah the average American working two jobs, barely making ends meet, doesn’t have an “extra 100” to toss anywhere.
throwaway00119 | 10 days ago
What does living paycheck to paycheck mean?
Lemp_Triscuit11 | 10 days ago
after your bills and living expenses are paid, you have no momey left over. you domt have any extra money to save every paycheck
RioRancher | 10 days ago
Our benefits are just sitting in the wealthy’s pockets.
All those capital gains they’re paying themselves tax free… that’s your quality of life. They appreciate your generosity.
doubagilga | 9 days ago
Capital gains are taxed.
RioRancher | 9 days ago
If they’re cashed out. They’re not.
They’re borrowing against them.
doubagilga | 9 days ago
Then they aren’t gains. When you pay those loans, the payments aren’t deductible. You can delay taxes when they are paper gains. That is important because in the “90% tax” days they could offset income with PAPER LOSSES. The net effect has been taxes on the wealthy increased.
RioRancher | 9 days ago
So Musk buying Twitter had a tax?
[OP] bloomberglaw | 10 days ago
Fewer workers and retirees are confident they will have enough money to live comfortably in retirement, according to a survey.
The survey found workers and retirees are concerned the government will make significant changes to the retirement system, and expressed declining confidence that Social Security and Medicare benefits would retain their value.
Many workers are struggling with debt, inflation and rising housing and health care costs, while retirees are increasingly worried about the future of Social Security and Medicare.
Read more in the full story.
-Elliot
ValdezX3R0 | 10 days ago
Been hearing Social Security will be gone by the time I'm eligible for like 30 years. I feel like most of my generation is resigned to the fact we will be fucked over. Hard to be optimistic when everything keeps getting harder financially. I guess I'll just look forward to dying in the Water Wars.
MixtureSpecial8951 | 10 days ago
2030-2035 is the latest projected date range for OASDI funds to be depleted. Payroll taxes should be sufficient to cover 73-83% of scheduled benefits.
So, there are a few options:
Benefits will be cut. Figure 19-27% immediate reduction in payments. These cuts will be automatic under existing statute.
Congress will take action and will appropriate funds from the general fund to cover the shortfall. The issue here is that SSA pays out ~$1.6T/year (FY25 numbers). This works out to $304B-$432B/year in increased spending. This will either have to come from reduced spending elsewhere or taking on further debt.
Interestingly, George W. Bush made social security reform a central issue since he first ran for office in the 1970s. It was known even then that the current path was unsustainable. In particular because the law requires that all SSA funds be “invested” in government backed bonds. Those pay a significantly lower rate, typically below even inflation. Consequently, the trust funds lose every year.
The proposed solution in the early 2000s was for a portion of SSA withholdings (for younger workers only) would be investable in the markets. The proposal then was that any gains would be kept in perpetuity. It was a pretty interesting idea.
Other nations (and US states) have opted to use funds, including pension funds, as covering wealth funds. They are invested in the markets and gain in value. Norway is the most famous.
Btw, if the US had indexed to the S&P, or just simply matched performance, since 1957 the trust fund balance would be sitting at $11.3T as opposed to $2.7T.
By way of reference, Norway’s fund is estimated to have assets of $2.1-2.3T.
Imagine what the US could do with its financial means. Won’t happen because we are simply too divided. We’d all, collectively, prefer everything to collapse and burn before compromising for a better future.
devliegende | 10 days ago
The idea that the US economy will be weak to the point that there is no money to tax while the markets boom is kinda silly.
MixtureSpecial8951 | 10 days ago
Exactly.
tms2x2 | 10 days ago
You could look at the guaranteed pensions that defaulted and the government had to pick up for what could happen with SS invested in the stock market. Look at how many hedge funds have blown up. How many companies in the DOW that have gone bankrupt over the last 100 years.
MixtureSpecial8951 | 10 days ago
The fear that you expressed is a large part of why there is a looming SSA crisis.
Yes, pensions can be mismanaged, underfunded, the company can go out of business, etc. That is the risk.
On the other hand, if the United Stated Federal Government goes tits up then we have much bigger issues. In other words, it won’t.
As is, the massive store of wealth from tax revenues is being eaten up by inflation and low interest, year after year, decade after decade. The ratio of workers paying into the system versus beneficiaries is sitting at ~2.7:1. This is down from 5.1:1 in 1960. By the early 2030s (less than four years away), that ratio will have fallen to ~2.2:1.
SSA is not a giant savings account where a person puts money away and then comes back to it later. Current payables are paid out with current revenue. Any excess is kept in the trust, but fundamentally it is not a complicated concept.
Imagine if you take all of your savings, all of your 401k, IRA, etc. and parked it for 20+ years. Between 2000-2024, inflation ran at an average of 4.91%; the SSA trust in that period earns an average of 3.94% in interest. Effectively, it lost money. And that is with transfer into the trust from the General Fund; without which the fund would lost out of several hundred billion in interest revenue.
Now game that same situation out for decades more. Every year your savings, your nest egg, your assets are worth less and less. Plus, you are having to draw on them. So your nest egg is being hit on both sides. That is what is happening with SSA.
The law states that the trust fund can only be invested in government backed treasuries. So, the government can borrow against the trust and then the trust receives interest. But, interest rates in federal debt is quite low, lower than inflation.
Using a portion of the fund would unlock significant potential. Instead of entrusting private equity to fund renewable energy, what sort of difference could a reasonable investment by the United States Sovereign Wealth Fund achieve? The US oil & gas market is approaching $1.6 trillion per year. Why not grab a slice of that? Why not invest in those industries and exert shareholder influence? Germany does it.
Why not allow a citizen to take a portion of their SSA taxes and pick from a list of investment options? The Thrift Savings Plan already exists for federal employees to invest their retirement savings.
The fear of failure is inviting failure. The longer we continue living in fear and failing to act out of fear the worst the remedy will be. We are on an unsustainable path and every citizen of any reasonable level of intelligence and awareness has known this for over 50 years. And yet, nothing has been done. Why? Fear.
throwaway00119 | 10 days ago
Compromising for a better future means sacrificing for the greater good. Western culture is built on "me me me." It's land of the prisoner's dilemma.
This sub and reddit in general is full of complaints that are purely first world problems. That tells you everything you need to know about compromising for a better future.
MixtureSpecial8951 | 10 days ago
Yup.
I find myself shaking my head at the vitriol and doomsaying at how all is lost, all is the worst it could ever possibly ever be. How unredeemable it all is and so on.
Umm, I’ve seen thousands of kids with their limbs hacked off, left orphaned to starve to death…
We have quite a way to go before we get there. Believe me, it can get far worse and we can totally right the ship.
Entire-Order3464 | 10 days ago
It was a terrible idea to invest SS in the market then and it is now. You misunderstand how SS works and the point of it.
Also, the US is divided for a good reason. One party is destroying the country and giving all the money to Billionaires. I'll leave it as an exercise for the reader as to which one.
AutomaticBoar | 10 days ago
Those workers need to increase the value of their labor.
LesnBOS | 10 days ago
Yes, let's all do that. Oh wait, we did. Productivity rose tremendously between 1975 and today- and the majority of profits went to the top 3% exactly as we wanted. We voted for that. And we will continue to vote to give all of the value of our work to our rentier class- this is America. We believe in billionaires not common good.
2starsucks2 | 10 days ago
And for a working population so easily divided by culture issues, it's like fishing with dynamite for the rich.
Reasonable_Fold6492 | 10 days ago
Every worker you mean? Friends from China, japan, korea, germany, france, Spain all say to me that they abandoned the idea or retiring. With low birth rate and people living longer its gonna be impossible to support the pension
StarkDiamond | 10 days ago
The boomer gen has robbed us of our future. They all have massive pensions and good retirements planned. For the rest of us, we get nothing.
throwaway00119 | 10 days ago
Gen Alpha will say the exact same thing about Millennials.
The fact that Reddit doesn't understand this blame game is infinitely long is genuinely hilarious.
UpsideClown | 10 days ago
Yes. All the Boomers have massive pensions and retirements. /s
veryupsetandbitter | 9 days ago
But they do have most of the wealth and assets which gives them far greater leverage than any other generation.
GDstpete | 9 days ago
NEED to elect Dems to reinstitute limitations on excessive C-level pay, stock buyback, and I think even day trading by Wall Streeters. Corporate and Wall Street greed has become too excessive. It will also need to overturn citizens United.. VOTE BLUE !!
TrueEclective | 10 days ago
I’m 49. I’m cashing out my retirement accounts next year to pay off my mortgage. I’m tired of the stock market manipulation and I’ve completely lost hope that I’ll retire.
Until then, I’ll enjoy the quality of life I thought I’d be living by now.
Healthy_Razzmatazz38 | 10 days ago
if you just kinda project it out, gen x and gen alpha are going to feel the pinch.
SS is funded by current payers, the surplus in the fund is because the boomers were contributing not drawing, towards the end of the boomers life they will be using the max while the highest income group will be gen x which is much smaller, then milienials should start over funding it again since gen x is small and melenials are large, then alpha repeats what gen x went through and theres not a large bulge atm behind that.
at least for gen x when they're retiring and millenials are in their highest earning years, a small increase can fix it, gen alpha wont have that large buldge behind them
getmeoutoftax | 10 days ago
This sentiment will grow even more, especially with AI replacing most white collar jobs in the near future. Plenty of people will “retire,” but not voluntarily. They’ll have to seek blue collar work if they want to have any employment prospects. Unless you’re a high earner, there is no such thing as disposable income anymore. Anything below manager level will soon be gone.
waitingOnMyletter | 9 days ago
As a 42y/o, I’m basically sure at this point I will be completely responsible for my own retirement. I think the idea of a government taking care of me for 30 years is kinda wild anyway.
I remember in my HS government and politics course, we had an entire chapter on the sovereign wealth funds of nations, of course the US’s social security funds were included in these discussions. The most sobering piece of this discussion was that social security basically will not exist after 2030. The account is going to 0, the silver wave will run it dry and there is nothing we can do to stop it without completely restructuring our tax system and really taxing the walthy. Well we all know that won’t happen, so that means there will be no money for retirement benefits by the time I’m retiring.
When I was listening to that, I basically told myself that I would need to be able to earn enough so that at the end of my career, I wouldn’t need social security or Medicare. It’s crazy how some things stick with you. I remember that lecture like it was yesterday.
Soggy_nach0341 | 9 days ago
I’m 36, I feel bad for Gen z and future generations. I know I’m probably not retiring until after 65. This is also counting that I’m “retiring” from active duty military service in 2 years.
Future generations may never retire. I guess this is another way for the government to funnel people to the military. “Want to retire give us 20+ years” and hope you don’t die before that’s over.
1098duc_w_the_termi | 10 days ago
US workers voted for this so it is what it is. Some time ago, we had a say in how we should handle our spending and we decided to vote for some the stupidest policies known to man. Trickle down anyone? Unfortunately, it won’t impact the ones directly responsible but their kids and grand kids. We fumbled the greatest economy and potential known to man.
dzyp | 10 days ago
This is ultimately the problem with voters deciding economic matters. Everyone complains about how the wealthy wants to privatize profits and socialize losses. I don't disagree with that complaint but I think it's true of everyone. We all want to do that. It's just that for most of us it's not as consequential as it would be for a billionaire... until voting day.
Doctor_Shotbottom | 10 days ago
remember to share your concerns and stop voting for the Republicans! the BBB is the single biggest threat to have come into existence which threatens social security and Medicare. Remember to 'thank' the right party for that gift of anxiety this fall. And good luck planning your retirement - you deserve a good retirement.
joepez | 10 days ago
How is this an economics article? It’s a short regurgitation on a survey that is looking at sentiment without looking at the causes for that sentiment. Everyone knows people are worried about their retirement why are they? Is it media driven? Lack of facts? Etc.
Then there some callout about wanting a fixed income financial product (what does that have to do with SS?) and finally a random quote about a concept of a plan for individuals without a retirement account to get one backed by the government.
What happened to actual economic analysis? This article is barely even personal finance.