I think if they were to take a portion of the moneys paid into SSA and leave it in a fund to draw interest, there would be no problems with the fund running out of money. Currently it all goes into the general fund and is spent on whatever!!:nuts:
8 Possible Social Security Benefit Changes
Sponsored by
by Philip Moeller
Thursday, January 21, 2010provided by
Social Security is moving toward its day of reckoning. And while the national upheaval might not be the train wreck that health reform has become, it will be a big, big deal. The last time major changes were made to the program was 1983. Efforts then to put Social Security on a sound long-term footing included higher tax rates for payments into the system, raising retirement ages, and treating some Social Security payments as taxable income.
These fixes generally have endured well. But as you might have noticed, government has trouble saying "No" to much of anything. This inherent bias toward generosity has been slowly eroding the financial footing of Social Security. It's also just hard to anticipate the future. For example, this recession alone will wind up paring years off the program's self-sufficient lifespan. Payments into the system are way off because of high unemployment but benefit expenses are higher. That's because many older employees who suffered job losses were forced to begin taking Social Security as soon as they became eligible at age 62. The soundness of the program is also adversely affected by longevity, and people are living much longer than the experts anticipated even as recently as 1983.
The erosion of Social Security certainly may unsettle current retirees. But its most corrosive impact is on younger employees, most of whom simply don't believe the system will be there to help them retire in 30 or 40 years. This eats away at all sorts of attitudes toward government, and simply must be addressed. This recession also has made it painfully clear that Social Security has become a far more dominant source of retirement income than ever was intended when the program was created in 1935. We can argue all day about why people fail to set aside sufficient retirement funds. But the practical reality is that "fixing" Social Security won't restore expectations of a comfortable retirement without major changes in private retirement saving and investing as well.
Even back in 1983, Congress realized it needed the political cover of an authoritative, non-partisan commission to enact higher Social Security taxes and raise retirement ages. Alan Greenspan headed the 1983 panel. Finding a towering figure to lead such an effort in these times will be challenging. But after the exhausting and abrasive health reform process, expect Congress to once again choose a non-partisan route toward the next round of Social Security changes.
In the meantime, planning work is underway. U.S. Senator Herb Kohl (D-WI), Chairman of the Senate Special Committee on Aging, asked the U.S. Government Accountability Office (GAO) to review benefit options affecting lower-income beneficiaries, who traditionally are the core focus of the program. This group, and particularly older widows, depends almost exclusively on Social Security. The GAO report reviewed eight areas where, it said, benefit changes were most commonly proposed. The report looked at how effectively each proposal would help lower-income beneficiaries, whether it would have much of a financial impact on Social Security, and on how difficult it would be to administer. Here are summary excerpts of its findings, which will be part of a larger Social Security report due soon from the Kohl committee.
Guaranteeing a Minimum Benefit. Guaranteeing a minimum benefit by increasing Social Security retirement benefits for those who have worked in low-wage jobs throughout their careers addresses concerns about benefit adequacy. One option would provide a minimum benefit equal to 120 percent of the poverty line for a minimum wage earner who had worked for 30 years. Another option would provide a minimum benefit equal to 100 percent of the poverty line for a 30-year worker and 111 percent of the poverty line for a 40-year worker. Social Security Administration officials said that, depending on how this option is designed, it could work well, but it is difficult to target lifetime low earners effectively.
Reducing Work Requirements for Eligibility. [more] http://finance.yahoo.com/focus-reti...ty-benefit-changes?mod=fidelity-readytoretire
