Will social security funds be available for people who retire in 30 years?

The Social Security Trust Fund is not running a surplus. It's accounting smoke and mirrors. The Trust Fund is actually ran a deficit of $60B for the most recent reporting cycle

See this link.

http://ssa.gov/oact/TR/2013/II_B_cyoper.html#96807

It's Table II.B1.—Summary of 2012 Trust Fund Financial Operations

The next to last row "Net increase in asset reserves in 2012" ostensibly shows a surplus of $54B.

However, note under income, there is this row.

Reimbursement from General Fund of the Treasury $114.3B

Money from the General Fund is tax revenue. Thus, the real net is a calendar year loss of about $60B.

breadcrumbs wrote:

Factuality wrote:

The "trust fund" to which you refer is a "promise to pay" on the part of the federal government . . . a promise, as it were, from one part of the government to another. Now, it may very well be a sound "promise to pay," and it may well be realized in the future, but it doesn't constitute money ...

Your apparent notion that the Social Security "surplus" is comprised of money sitting in a federal account somewhere couldn't be further from the truth.

Does the trust fund not contain US Treasury Bonds? Are you trying to differentiate between bonds and cash, or is there something other than bonds in the SS fund?

What matters is what the "trust fund" does not contain, and that which is does not contain is money. The federal government cannot pay Social Security benefits in "bonds." When a person gets a Social Security check, and it is deposited in his or her bank account, what gets deposited is money.

That which exists in the "trust fund" is, as it were, a promise on behalf of the federal government to go get the necessary money when the time comes.

The trust funds are "off-budget" and treated separately in certain ways from other federal spending, and other trust funds of the Federal Government. From the U.S. Code:

EXCLUSION OF SOCIAL SECURITY FROM ALL BUDGETS Pub. L. 101-508, title XIII, Sec. 13301(a), Nov. 5, 1990, 104Stat. 1388-623, provided that: Notwithstanding any other provision of law, the receipts and disbursements of the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund shall not be counted as new budget authority, outlays, receipts, or deficit or surplus for purposes of - (1) the budget of the United States Government as submitted by the President, (2) the congressional budget, or (3) the Balanced Budget and Emergency Deficit Control Act of 1985.

agree with this guy

Neil wrote:

I wish it would go away today. I don't want my kids or your kids to pay for my old age.

Neil wrote:

I wish it would go away today. I don't want my kids or your kids to pay for my old age.

Are you young enough to make more money before you retire?

If ANYONE has a strong opinion that they don't want their children to have to pay for them in their old age, then they'd best earn enough and invest enough so that that doesn't happen. Not hard to do.

My brothers' inlaws apparently were living a financial lie for years, making everyone and their brother believe they were wealthy when in fact they were up to their eyeballs in debt. Well, the sh!t finally hit the fan, and they were forced out of their super nice house into a 2-bedroom apartment, and they have about $9000 to their names (in their mid 70s and retired). The mother-in-law made this comment to their children -- "Well, we took care of you for 18+ years. Now it's your turn to take care of us!"

Umm...how about NO. If children want to take care of their parents financially then that is completely up to them and certainly not due to something the mother might say. They should NOT feel obligated to take care of them just because they made bad financial decisions. Ok to help them get into an apartment, show them how to budget their limited income and perhaps tell them not to get them any presents for Christmas or birthdays, but beyond that, the children shouldn't feel obligated to do anything.

Reality checker wrote:

The trust funds are "off-budget" and treated separately in certain ways from other federal spending, and other trust funds of the Federal Government. From the U.S. Code:

EXCLUSION OF SOCIAL SECURITY FROM ALL BUDGETS Pub. L. 101-508, title XIII, Sec. 13301(a), Nov. 5, 1990, 104Stat. 1388-623, provided that: Notwithstanding any other provision of law, the receipts and disbursements of the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund shall not be counted as new budget authority, outlays, receipts, or deficit or surplus for purposes of - (1) the budget of the United States Government as submitted by the President, (2) the congressional budget, or (3) the Balanced Budget and Emergency Deficit Control Act of 1985.

So? The point here is that any Social Security "surplus" does not entail any accumulation of actual cash attributable to payroll tax revenues exceeding Social Security benefits paid out for a given year or years. The "trust fund" is an accounting mechanism, by which one part of the federal government tells the balance of the federal government how much the latter owes the former.

Social Security benefits are (and must be) paid in actual money, in cash. The "trust fund" does not contain (and never has contained) any money/cash. That's the salient issue.

So, it's just like the stock market, or banks, or....what was your point again?

Commoner wrote:

Factuality wrote:

So? The point here is that any Social Security "surplus" does not entail any accumulation of actual cash attributable to payroll tax revenues exceeding Social Security benefits paid out for a given year or years. The "trust fund" is an accounting mechanism, by which one part of the federal government tells the balance of the federal government how much the latter owes the former.

Social Security benefits are (and must be) paid in actual money, in cash. The "trust fund" does not contain (and never has contained) any money/cash. That's the salient issue.

So, it's just like the stock market, or banks, or....what was your point again?

There's no need for you to be snide if you can't keep up, *sshole.

The point is that what the Social Security holds in its "trust fund" is not actual money. So long as the revenue generated by the payroll tax is sufficient to cover benefits paid, there is no problem. But at such time as Social Security-specific revenues no longer are sufficient to cover Social Security benefits that are to be paid out, the federal government will have to make up the difference either by increasing taxes or borrowing money (or by reducing benefits).

At the same time, pointing to the putative "surplus" that is said to exist in the Social Security "trust fund," as if that "surplus" can be drawn upon to make up the deficit between revenues received and benefits paid fails to appreciate that the "surplus" doesn't consist of money. So, the federal government still has to get the money.

Got it now? Twit.

So it's like a bank, or the stock market, or any other investment tool. Got it.

(Instead of being a asshat, you could have just said I was right.)

K5 wrote:

They will be unless you allow the elite to take them away

This.

You'll be eating out of garbage cans in 30 years--this country is in serious decline like all formerly great empires--235+ years--- were done--it's all down hill from here.

The funds will be there. As we should all know by now, the Fed Reserve can create an infinite amount of money if they want to. Whether it will be available is a whole other matter. Its looking like the Fed Reserve and the government is more concerned about guaranteeing the value of Flagpole's 401K rather than Social Security.

fdadssa wrote:

?

[quote]ryan foreman wrote:

The funds will be there. As we should all know by now, the Fed Reserve can create an infinite amount of money if they want to.

Whether it will be available is a whole other matter. Its looking like the Fed Reserve and the government is more concerned about guaranteeing the value of Flagpole's 401K rather than Social Security.

[quote]fdadssa wrote:

Quite!

http://danariely.com/?s=inequality

The government is more interested in ensuring the reelection of sitting officials rather than securing the fiscal solvency of a system designed to protect people who paid into the system (workers vs. freeloaders).

Not on it's current path. Changes will need to be made to keep it going. Bush and the Republicans tried to address the problem but the obstructionist liberals didn't like their ideas and came up with none of their own. It's certainly higher on the must fix scale than global warming or gay marriage.

I did a lot of research on SS and Medicare a while back for a book I was ghost writing. Both receive a mandated influx of capital from general revenue (i.e., taxes) and both are currently running an annual deficit. You can confirm this by looking up Table II.B1 in their respective trustee reports. The annual deficit of SSFT was $60B in CY2012. Medicare was about $220B, to the best I can remember.

Medicare is by far the biggest problem. It cannot be fixed without a major overhaul. Social Security can easily be fixed, but politicians don't have the courage to do so. The most logical reforms would be 1) to increase eligibility to age 70 or 72, 2) to increase tax rates of SS benefits as income increases, eventually reaching 100%. This would effectively end SS for everyone making more than a certain level of retirement income. 3) Increase the cap on SS withholding.

Whether the money in their respective trust funds is real is a matter of much debate, since the government can print money. The bonds are special non-negotiable bonds. They are more like an IOU. The interest paid annually by the bonds is paid by issuing more of these non-negotiable bonds, so they are like more IOUs. This is similar to a Ponzi scheme, but it could continue indefinitely until the bonds have to be redeemed to paid annual shortfalls in SS payments.

This is the problem.

In order for the SS Trust Fund to redeem these non-negotiable bonds to pay SS benefits, the government will have to issue new Treasury bonds and sell them on the open market. The effect is almost exactly the same as if no bonds existing in the trust fund at all.

Social Security is an immoral institution that needs to go away. Future generations and the economy in general will be better off without it.