Poll: What is the Best Solution to Fix Social Security

Stop early collecting of SS or raise the age for early collecting from 62 to 65 and raise it whenever the full retirement age is increased.

STOP the Gov't from using our hard-earned money to pay for other issues they think are important. That ss money needs to be put into a safe account and designated as THE PEOPLE'S SS MONEY ONLY. Americans worked hard and long for that money and it should go right back to us and ALWAYS be there for all that have worked legally.

Editor Comment: Thanks for sharing your input Char. Unfortunately this is a big misconception. The money in the SS Trust Funds can only be used only to pay SS benefits. The problem is people are living longer lives, lots of us baby boomers are taking benefits, and there aren't enough young people paying in. Congress has to take some action to fix the problem.

The Committee for a Responsible Federal Budget has a calculator showing the effect of various approaches to Social Security solvency. The calculator looks at benefit changes, revenue changes and changes to other benefits provided by Social Security.

The change to tax all income above $400,000 had the greatest benefit, providing a 67% decrease in the funding gap. Slowing benefit growth to the top 70% of benefit earners close the gap by 58%, raising the retirement age to 69 closes the gap by 36% and changing the COLA formula and means testing gives a 41% reduction in the funding gap.

A search for “crfb reform calculator” will show the calculator. I’d put in a direct link but often a link puts me into the spam folder.

When both my wife and I applied for social security, each time we visited the local branch to tie up loose ends the application center was half full of people under the age of 35 applying for some form of benefits. They all looked quite healthy I might add.

Editors comment: If you are not yet 62 you cannot get Social Security benefits, unless you are disabled, an unmarried surviving wife, or a child under 16 of a deceased person eligible for Social benefits. So I am not sure what those young people expected to get, but I doubt they were going to get anything unless they met these criteria.

The federal government has borrowed money from Social Security trust funds to cover authorized expenditures, such as highway construction and armaments, instead of raising additional taxes. This is because the trust funds' assets are Treasury securities, which essentially means that Social Security payroll tax collections are being lent to the government. In this way, the trust funds can be considered to be indirectly spent for non-Social security items- But they never returned the borrowed funds- now we loose the benefits completely. Congress should be required to pay us back with interest. That is what would be expected of us.

There is nothing new about trust fund money put into US securities, it has been done since the inception of the program. The funds have always been repaid with interest since 1937.

From Social Security:
By law, income to the trust funds must be invested, on a daily basis, in securities guaranteed as to both principal and interest by the Federal government. All securities held by the trust funds are "special issues" of the United States Treasury. Such securities are available only to the trust funds.

In the past, the trust funds have held marketable Treasury securities, which are available to the general public. Unlike marketable securities, special issues can be redeemed at any time at face value. Marketable securities are subject to the forces of the open market and may suffer a loss, or enjoy a gain, if sold before maturity. Investment in special issues gives the trust funds the same flexibility as holding cash.

The rate of interest on special issues is determined by a formula enacted in 1960. The rate is determined at the end of each month and applies to new investments in the following month.
The numeric average of the 12 monthly interest rates for 2023 was 4.125 percent. The annual effective interest rates (the average rate of return on all investments over a one-year period) for the OASI and DI Trust Funds, combined, was 2.387 percent in 2023. This lower effective rate resulted because the funds hold special-issue bonds acquired in past years when interest rates were lower.

The problem as I see it is many in Congress do not support the program, want to see it privatized or dead and hope those things happen by refusing to address the funding gaps that have developed.

Good points Mike. No matter how hard anyone tries, we can't seem to shake this common bit of misinformation that the government has somehow stolen our Social Security money. The government has been paying it back for a long time now as current income isn't high enough to cover promised payments. It will all be paid back by 2035 according to current estimates, when, unless something is done, the trust funds will be exhausted. Then the only money available to pay promised benefits must come from payments by current workers.

Admin, to be clear only the first two sentences and the last sentence are my points, everything else comes straight from the Social Security website, I should have used quotations marks.

Social Security taxes invested in ”special issue” securities are mingled with the general Treasury funds so it is being used to pay for other government activities as Char Rizzo and Joyce said. From Social Security: “Tax income is deposited on a daily basis and is invested in “special issue" securities. The cash exchanged for the securities goes into the general fund of the Treasury and is indistinguishable from other cash in the general fund.” The Treasury is borrowing from Social Security. Why would the Treasury pay interest on money it can’t use?

The Trust Fund is an accounting tool that represents the amount of money owed to Social Security through interest on securities and current payroll taxes. The Trust Fund also accounts for payment of benefits and administrative costs, our Social Security checks come from the Treasury Department not the Social Security Administration.

The interest paid to Social Security by the Treasury is substantial. From the May 2024 Board of Trustees report on Social Security in 2023 interest on special issue securities totaled $66.9 billion or 5% of Trust Fund income but Trust Fund assets dropped from $2.830 trillion to $2.788 trillion. Current payroll taxes aren’t enough to cover benefits so the reserves are being redeemed to cover the gap. When the reserves are depleted payroll taxes are expected to cover only 83% of benefits due, resulting a 17% benefit cut.

Rufus according to Social Security:
“As of March 2024, there were over 67.5 million Social Security beneficiaries. Approximately 75.1% of those beneficiaries were retired workers and 10.8% were disabled workers. The remaining beneficiaries were the survivors of deceased insured workers or the spouses and children of retired or disabled workers.”

Thanks for helping clear up these misconceptions Mike.

Excellent article and explanation given about social security benefits and funding. Thank you!

On August 14, 1935, President Franklin Delano Roosevelt signed the Social Security Act into law. That means that for baby boomers, most of their parents started their working careers before Social Security.

To Mike; Do you think all of the people that are collecting social security based on your above comment are what President Roosevelt had in mind back in the year of our Lord 1935 ?

Rufus,

On June 8, 1934 FDR notified Congress of his intent to start a Social Security program. By Executive order on June 29, 1934 FDR announced “THE INITIATION OF STUDIES TO ACHIEVE A PROGRAM OF NATIONAL SOCIAL AND ECONOMIC SECURITY.” The order created the Committee of Economic Security(CES).

From the Executive order “ The Committee shall study problems relating to the economic security of individuals and shall report to the President not later than December 1, 1934, its recommendations concerning proposals which in its judgment will promote greater economic security.”

The executive director of the study was Edwin Witte. After meeting with FDR Witte reported this:
"He [the President] felt committed to both unemployment insurance and provisions for old age security and also wanted the committee to explore thoroughly the possibilities of a unified (package) social insurance system affording protection against all major personal hazards which lead to poverty and dependency.”

The CES had this as their stated mission: “The field of study to which the committee should devote its major attention is that of the protection of the individual against dependency and distress. This includes all forms of social insurance (accident insurance, health insurance, invalidity insurance, unemployment insurance, retirement annuities, survivors' insurance, family endowment, and maternity benefits) . . .”

Apparently FDR did have that in mind.