Like many people in the various post-Boomer generations, I grew up being told repeatedly and plausibly that Social Security would not be around by the time I was old. Although I left the country—and that particular economic context—behind when I was 23, that mindset has stayed with me. Something in me doesn’t really expect to be able to retire, ever. Deep down, I expect to have to work until I am unable to, either from ill health or lack of opportunities. And then I expect to live in much reduced circumstances.
I was fortunate to start my adulthood without student debt (in-state tuition at UC Berkeley, back when it was a three-digit number of dollars a semester, plus two parents working full-time as lawyers. Also known as privilege and luck.) I’ve done my best to save money here and there, and joined whatever pension schemes I was eligible for. But many of my contemporaries, and even more people younger than me, haven’t had that good fortune, and many who have saved have watched the value of their savings melt away in the financial crisis.
This topic came up in the punishment and statistics thread. It’s a difficult discussion to have in hard times, because there really does not seem to be enough money to go around. We all feel vulnerable.
Lori Coulson, who used to work for Social Security, made a comment that was, for me, a completely different way of thinking about things. The key excerpt:
Right now if the current financial circumstances continue for the next 20 years SSA will be able to pay out full retirement benefits until 2036. If we raise the cap on the amount of income subject to OASDI tax (currently $110,100), the program will be solvent until 2075, when it may need to be tweaked again.
SSID(isability) is in trouble, so is Medicare. Getting people back to work would solve most of the problem (more revenues). Allowing people who don’t have insurance to buy into Medicare, or reducing the age at which one becomes eligible for Medicare (say age 50)** would also help, again more revenue because enrollees pay about a premium of about $100-200 per month.
**This might keep the over-50 crowd employed, as their health insurance wouldn’t be coming out of their employer’s pocket.
Her thesis—and it’s a plausible one—is that these waves of Serious People Telling Us SS Is Going Away are (a) Wall Street wanting its hands on our investment money, and (b) a lingering aftereffect of discussions that have taken place as the system has been adapted over time.
There is nothing new under the sun — the Boomers got the same “SS won’t be there for you” back in the late 1970s and early 1980s. That’s when Reagan and Congress passed the last changes to OASDI.
In 1983, the retirement age was raised from 65 to 67, and the FICA tax was doubled (both the employee and the employer contribution) to build the SS Trust Fund. Please note the Trust Fund was designed to deplete as the Boomers die off.
So perhaps I was naïve in thinking that, because everyone has always told me that I will get a less comfortable retirement than my parents’ generation, it might be true. Maybe I didn’t think through the idea that voter pressure can change even those things that were presented to me as immutable. But I will note, judging by the thread, that I’m in very good company.
I’d suggest you read the subthread before getting onto the topic here. But be aware, as you do so, that there aren’t any villains, knaves or fools in the conversation we’re having here. We’re just a bunch of people who don’t want anyone—ourselves, our elders, or our children—to be impoverished in old age.