Observations on life

When thinking about Social Security, why do we focus on the past and not the future?

“It is impossible under any social insurance system to provide ideal security for every individual. The practical objective is to pay benefits that provide a minimum degree of social security—as a basis upon which the worker, through his own efforts, will have a better chance to provide adequately for his individual security.” — From the Report of the Social Security Board recommending the changes which were embodied in the 1939 Amendments.


How did we get from “minimum degree of social security-as a basis” to 50% of married couples and 71% of single persons relying on Social Security for 50% or more of their income and 23% and 43% relying on SS for 90% or more of their income?

It cannot be that 50% of couples and 71% of singles were poor and unable to save their entire lives. It can be that a good percentage of these Americans lived in the moment and failed to plan for the future.

We look at the average Social Security benefit and say; oh my, we need to improve Social Security. Wait a minute, that average includes people retired many years, people who had less of an opportunity to use the many tax-advantaged tools available today.

Why do we want to increase Social Security benefits, increase taxes to pay for them and add additional liabilities to the program based on the past? People should be less dependent on Social Security in the future, not more. But I doubt many people want to hear that message.

Just how much of their financial security do Americans want to risk to the whims of Congress now and in the future?

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Categories: Observations on life

3 replies »

  1. I fully understand your post about thinking about the future and not the past. That being stated I also must comment that your perspective is not altogether accurate. There was and always will be a segment of the population for whom SS will be a major part of the monthly income. In fact with so many people being displaced from full time employment to part time with no benefits I suspect that percentage to grow. You and I were fortunate enough to draw a fairly decent salary in a company with excellent benefits. That allowed us to be able to put away more of our earnings into a fund for retirement. But I must counter with another example that being my parents. My Dad and Mom were fortunate enough to have inherited the home they lived in from my Grandpa. That however did not enable them to live so high and so for most of my Dad’s fifty years of working he worked three jobs or for the years he owned his own business he worked 60-70 hours per week. In the last ten or 15 years because the government passed the Keogh Act he did manage to save about $40000 so after his passing in 1988 my Mom lived on that plus SS and the residual of rents from a property they owned. When the property was vacant she struggled so the point is SS is and was an integral part of her income as it is for many hard working people who did not enjoy the better salary and great benefits we did and consequently were/are left with very little income available for long term/ retirement savings. In spite of that my mom who lived 25 years after my dad’s passing did so by drawing down ever so little of the savings so as not to be without.
    So the point I want to make is that often the, “have’s”, tend to think it is because of their good planning and that by extension therefore the, “have nots” did not plan and my point is merely that is not just all the truth. Remember there are many for whom the ability to provide much for the future is curtailed by the needs of day to day living.

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    • My perspective does not include the poor who I understand cannot save, but far fewer than are should be so dependent on SS. My father was car salesman who worked seven days a week 8-9 and had no benefits. When he was 67 the boss called him in to the office and told him he was no longer needed. They had a few thousand in the bank plus Social Security. That was it. They bought their first house at age 65 which they shared with my sisters family to afford. Being products of the depression I could never convince them to invest in anything so they kept what they had in a checking account.

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  2. My impression of why Social Security was started during the Great Depression was to keep grandma and grandpa from dying in the streets. If the objective is to pay benefits that provide a minimum degree of social security, that is, enough to keep you from losing a place to stay and being able to eat, then you will not be dying in the streets. When Roosevelt signed the Social Security Act in 1935, he said “we have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age”.**

    Assuming that the elderly had savings, what drives them to bankruptcy today is medical costs and that has been “solved” or greatly reduced by Medicare.

    The question remains why isn’t Social Security only collecting enough taxes to pay out a cash benefit in the amount of money the government has determined as poverty level? According to the government the poverty level is earning less than $12060 per year for a single person plus $4180 for every extra person in the household (in 2017).

    That number is so low that even the government has determined that they will pay you benefits for other programs like Obamacare if you make 400% of the poverty limit.

    Still, why does Social Security have a tiered payout based on your earnings? Why isn’t it a flat rate for everybody or the minimum amount of money need to survive? The tiered payout implies with its COLA increases that it is a retirement plan and politicians have been buying votes with promises of Social Security benefits. The politicians hijacked the program. Roosevelt never said that the government was going to give you your dream retirement with Social Security money but you would never know that listening to AARP.

    ** Franklin D. Roosevelt: “Statement on Signing the Social Security Act.,” August 14, 1935. Online by Gerhard Peters and John T. Woolley, The American Presidency Project. http://www.presidency.ucsb.edu/ws/?pid=14916.

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