Is Social Security Going Broke? Possible Solutions

More than one-half of Millennials believe there will be no money in the Social Security system by the time they are ready to retire, according to a 2014 Pew Research report. “I don’t think anyone honestly expects to collect a single penny they pay into social security. I think everyone acknowledges that it’s going to go bankrupt or kaput,” says Doug Coupland, author of “Generation X.”
 
What went wrong? Will Social Security go bankrupt?

A Brief History of Social Security

In 1935, few of the program’s creators could have anticipated the condition of the Social Security program today. The country was in the midst of the Great Depression with a quarter of its labor force – 15 million workers – idle, and those with jobs struggled to make ends meet as their hourly wages dropped more than 50% from 1929 to 1935. Families lost their homes, unable to pay the mortgage or rent. Older workers bore the brunt of the job losses, and few had the means to be self-supporting. One despairing Chicago resident in 1934 claimed, “A man over 40 might as well go out and shoot himself.”
 
Hundreds of banks failed, erasing years of savings of many Americans in a half-decade. People lived in shanty towns (“Hoovervilles”) or slept outside under “Hoover blankets” (discarded newspapers). Breadlines emerged in cities and towns to feed the hungry. Thousands of young American men hopped passing trains, sneaking into open boxcars in a desperate attempt to find work.
 
Democrat Franklin D. Roosevelt (FDR), promising a New Deal, defeated former President Herbert Hoover in 1932 with more than 57% of the popular vote and 472 of 531 Electoral College votes. Three years later, FDR signed a bill that would “give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age.”

Can Social Security Be Saved?

More than one-half of Millennials believe there will be no money in the Social Security system by the time they are ready to retire, according to a 2014 Pew Research report. “I don’t think anyone honestly expects to collect a single penny they pay into social security. I think everyone acknowledges that it’s going to go bankrupt or kaput,” says Doug Coupland, author of “Generation X.”
 
What went wrong? Will Social Security go bankrupt?

A Brief History of Social Security

In 1935, few of the program’s creators could have anticipated the condition of the Social Security program today. The country was in the midst of the Great Depression with a quarter of its labor force – 15 million workers – idle, and those with jobs struggled to make ends meet as their hourly wages dropped more than 50% from 1929 to 1935. Families lost their homes, unable to pay the mortgage or rent. Older workers bore the brunt of the job losses, and few had the means to be self-supporting. One despairing Chicago resident in 1934 claimed, “A man over 40 might as well go out and shoot himself.”
 
Hundreds of banks failed, erasing years of savings of many Americans in a half-decade. People lived in shanty towns (“Hoovervilles”) or slept outside under “Hoover blankets” (discarded newspapers). Breadlines emerged in cities and towns to feed the hungry. Thousands of young American men hopped passing trains, sneaking into open boxcars in a desperate attempt to find work.
 
Democrat Franklin D. Roosevelt (FDR), promising a New Deal, defeated former President Herbert Hoover in 1932 with more than 57% of the popular vote and 472 of 531 Electoral College votes. Three years later, FDR signed a bill that would “give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age.”
 
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Understanding Political Correctness (PC) – What It Means & How It’s Evolved


 
 “Sticks and stones may break my bones, but words will never hurt me.” This old English rhyme is often heard during one’s childhood, typically as comfort to a victim of ridicule by other children. Implicit in the advice is the unspoken admonition to the child to grow up and ignore the pain of verbal abuse – after all, it’s only words.
 
Many believe that the avoidance of words that may offend, marginalize, or insult a group of people – political correctness (PC) – has gone too far. According to PC critics, PC promotes a society of victimhood and endangers the public at large by limiting discussion about controversial subjects. Chris Cox, the executive director of the NRA Institute for Legislative Action, wrote in a USA Today op-ed about the Orlando mass shootings that the “administration’s political correctness prevented anything from being done about it.”
 
Conservatives claim that PC is a threat to the first amendment and our right to free speech. Columnists liken modern-day America to Ray Bradbury’s “Fahrenheit 451” or George Orwell’s future society in “1984“. In “1984”, Big Brother’s thought police relentlessly pursue anyone foolish enough to say anything that might be offensive to someone. Surprisingly, liberals – often blamed for the expansion of PC – have their own misgivings about verbal censorship. Ralph Nader, a former third-party candidate for president, says, “You can’t say this about that, and you can’t say that about this. And the employer tells you to hush. And perhaps your wife tells you to hush, and your kids tell you to hush. It’s gotten absurd.”
 
Does one’s choice of words matter? Have efforts to avoid offense stifled free speech as many claim? Is political correctness an expression of politeness, evasion of hard truths, or extreme sensitivity? Or is an expression of anti-PC sentiment simply incivility, indecency, or vulgarity, as Mark Hanna writes in TIME?
 
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How to Maximize Social Security Benefits

social security moneyIn 2004, Social Security benefits were projected to account for 40% of a baby boomer’s post-retirement family income, and almost all baby boomer retirees were expected to receive benefits, according to a Social Security Administration study. But Dean Baker, co-director of the Center for Economic and Policy Research, thinks those projections were conservative. Today, according to Baker, Social Security payments account for 90% of income for one-third of all seniors and more than 50% for two-thirds of them. For unmarried seniors, the dependence upon Social Security is even greater, accounting for almost three-quarters of their income.
 
As pensions become increasingly rare – replaced by defined contribution plans, which are subject to the volatility of financial markets – the importance of Social Security continues to grow. In fact, the Securities Industry and Financial Markets Association claims that Social Security is now the “most prevalent and important single source of income for retirees.”

Social Security Monthly Dollar Retirement Benefits

Generally speaking, the amount of Social Security you receive is based upon your total lifetime earnings that were subject to Social Security taxes – as of 2014, maximum taxable earnings stand at $117,000 per year. In other words, the more money you make over an extended period, the more you receive when you begin withdrawing.
 
The specific dollar benefit paid to a beneficiary is the result of an SSA calculation, based upon that person’s top 35 years of earnings, adjusted for inflation. It is further affected by the age at which you begin receiving benefits. In 2014, according to the Social Security Administration, the maximum payment for an individual who begins claiming at full retirement age is $2,642 per month.
 
For help estimating your future benefits – as well as verifying your earnings each year – the SSA provides a useful online resource. Many of the criteria that determine the amount you receive, however, are actually within your control.

Social Security Age Withdrawal Options

There are several options for when you can start withdrawing your Social Security benefits.
 
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