Social Security

A Brief History of Social Security | Retirement Researcher

Social Security is a mystery to most people and widely misunderstood as well. As a result,understanding and evaluating the political rhetoric is nearly impossible. Click on the link below and you will find a brief history of the program. What you will find is a program that has steadily improved benefits, but while doing so has failed to provide adequate funding despite repeated warnings from the Trustees of the need to do so. 

Wade Pfau provides a brief history of Social Security and how it got to where it is now.

Source: A Brief History of Social Security | Retirement Researcher

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5 replies »

  1. Many people know Social Security is in trouble and by 2034 or sooner it will only be able to pay about 75% of the projected benefits. The Social Security tax has not been raised since 1990, but benefits and number of people covered each year have continued to increase. You do not have to be a mathematician to see this formula is not going to work.

    Only 25% of Fortune 500 companies offer pensions. Many companies are also scaling back on 401 K contributions.
    Many workers are finding it very hard to set money aside for retirement, with the average account having just $60,000.
    School fees for high school activities are going up every year, I remember when there were no fees.

    Among elderly Social Security beneficiaries, 53% of married couples and 74% of unmarried persons receive 50% or more of their income from Social Security.
    Among elderly Social Security beneficiaries, 22% of married couples and about 47% of unmarried persons rely on Social Security for 90% or more of their income.

    Social Security must be fixed and it can be fixed. Increase the Social Security tax by the same percentage the COLA goes up, From 2014 to 2015 the tax on $25,000 in income would have gone up $52.00.
    Increase the amount of income that is taxed for Social Security to 1 million dollars.
    Reduce benefits for non working spouses that never paid anything into Social Security, only while the working spouse is alive and getting their full benefit.

    If we do not fix Social Security we will have to expand the welfare programs and that will have to be paid for out of general tax revenues and deficit dollars. That math does not work.

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      • I would rather live on $5,620 with 1960 prices. Than what we have today. Lies, Damned Lies and Statistics.
        There are more people today living with less than $44,211. These are averages, so there are more people living above the $50,000 also. That is good for those living above the average, not so good for those living below the average.
        A new home in 1960 average cost $12,700, 2.26 times your annual income. today the average price of a new home $340,000, 6.8 times your annual income. You pay much higher property tax on your home today. Also, cars are way more expensive.
        The high prices we have today hurt the bottom 50% of earners harder than it did in 1960.

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      • Do you know why? Because families started living on two income and started driving up the price of homes because they wanted more and bigger and then we got to the point where two incomes became a necessity. In other words families raised standard of livings but somewhat artificially.

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      • Averages here are quite meaningless because of the wide variations geographically. Both the average income and price of a house are much higher in my area than say Alabama as are taxes. You may be quite wealthy earning $200,000 in Montana, but not so in North Jersey for example.

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