It seems like most people realize that Social Security is "in trouble" but I always wonder how people actually conceptualize that. For example, I think most people my age (mid-late 30s) don't expect Social Security to be there for them at today's levels. But what level do they think? I generally plan for 50%. According to this article (and others I have read) that is actually overly pessimistic:
Social Security will start paying out more in benefits than it absorbs in taxes this year which will lead the retirement program's trust fund to become exhausted in 2036, according to the latest annualtrustees report. After 2036, the program will only be able to pay 77 percent of promised benefits. By 2085, it will be able to pay 74 percent of promised benefits.
THIS is what drives me crazy, though:
The Journal reported that AARP policy chief John Rother is pushing the organization to accept benefit cuts as part of a deal to make Social Security solvent. Rother's thinking, according to the paper, is that tax increases alone can't keep the program's $2.6 trillion trust fund from running out of money, so benefit cuts must be included as well.
Well, except for the fact that they can. It feels like it has been at least 20 years that I have been hearing that to "fix" social security financially, all that needs done is to lift the earnings cap. Low and behold, once again:
A September 2010 Congressional Research Service report found that lifting the cap, without also raising benefits, would make the program solvent for the foreseeable future.