Friday, September 16, 2011

Saving Social Security


Social Security is for Real

Lately Social Security has been pilloried in the news. For years people have said it’s bankrupt and won’t be there when the Baby Boomers retire. I believe that nothing could be further from the truth. Each year Social Security pays out hundreds of billions of dollars in retirement benefits. According to the Social Security Administration, even without changes, it will be able to pay out 75 percent of retirement benefits for generations.  Inevitably there will be changes but changes are phased in gradually. The last major revamping of the program began under the Greenspan commission in 1983 and their changes will be fully implemented by 2017 --- some 44 years later. As people live longer, the full retirement age will likely be pushed up a few years although there will still be early retirement options. The wages subject to Social Security taxes likely will rise and the way inflation is calculated may change. These changes amount to small cuts in benefits but are intended to preserve the program much as we know it now. Social Security is completely integrated into the fabric of American life and will probably outlive us all. Anyone planning their retirement would be foolish not to incorporate Social Security into their thinking.