The Lost Opportunity On Social Security
![SocialSecurity-2[1]](http://virginiavirtucon.files.wordpress.com/2013/01/socialsecurity-21.jpg?w=475&h=297&crop=1)
What a lost opportunity. One of the taxes that increased as of Jan. 1, 2013 but was NOT included in the “fiscal cliff” deal is the Social Security payroll tax. For the past two years, employees have paid 4.2% in payroll taxes to fund Social Security, down from 6.2%. When you get your first paycheck of 2013, it will be less than your last paycheck of 2012 because your withholding level is reverting to the higher level.
The smart thing to have done with the 2% Social Security payroll tax cut would have been to give each employee the option — let it go back to 6.2% and get your full benefits upon retirement (if you’re guilible enough to believe you’ll get them) or keep paying 4.2% into the system with the other 2% mandated to go into a 401(k) or IRA in exchange for a slightly reduced level of benefits upon retirement. This way no one would have been forced into a private account; the reduction in benefits for people opting for private accounts would help with Social Security’s long-term solvency issues; and no matter which choice you make you would have some sense that your money is not just being sucked out of your pocket because you had some control over the decision.
7 Responses to “The Lost Opportunity On Social Security”
Jim – You should know better than to help perpetuate the myth that SS recipients will someday be hi-jacked!! You may remember that Alan Greeenspan headed a commission in 1983 to help ensure the stability of the SS fund………..that was 30 years ago!!! I work full time and also draw a nice SS check each month and will receive such til i make my descent or ascent to another world!!! But unless you have evidence of SS insolvency, please dont flame the fires or shout “fire” when the theatre is empty and there are no flames!!!
Ken, I hardly think that what I wrote about is shouting “fire.” You do realize that expenditures exceed revenues, don’t you? According to the Social Security trustees report: “Social Security’s expenditures exceeded non-interest income in 2010 and 2011, the first such occurrences since 1983, and the Trustees estimate that these expenditures will remain greater than non-interest income throughout the 75-year projection period.” http://www.ssa.gov/oact/trsum/index.html
That is the evidence of insolvency right there. We are on an unsustainable path and we had an opportunity to make a change for the better that was squandered.
Agree with Riley here. It would be good if the other 2% would go into a Roth IRA type account so withdrawals would be tax free.
Ken, are you denying the fact that Social Security is headed for bankruptcy? Remember that politicians of both parties used Social Security surpluses to make deficits look smaller.
Yes this is shouting ‘fire’ and no, the fire will be put out asap………they had 2 bad years which will be traced to several factors including rise in baby boomers……..these factors will be offset………govt has never let anything like this go unchecked….go……… over the annual report and see where the fixes can and will be made
So you admit there needs to be fixes. That is all I am saying. The report says that the 75 year outlook continues these deficits unless changes are made. I was merely saying here that there was an opportunity for a fix and they let it pass by.
Ah, yes, to say that “the fire will be put out” means that you acknowledge the existence of the fire. Well, I guess we are making progress! LOL
Isophorone (what does your name stand for!!!…..i do not claim tha tSS is headed for banruptcy…..given the mammoth size and scope of SS, of course it has been and will continue to have bad years (if they didnt, then they would likely be wasting huge amts of cash flow)…….cash flow problem??? yes…..fire………..No……….
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