Projections on Social Security solvency are disconcerting

By: 
Steve Lyon
A recent story stating that Social
Security and Medicare will run
out of money within the next 20
years is disconcerting news to anyone
over the age of 45.
The latest projections on Social Security’s
solvency were recently released by
the federal government. The
program won’t be able to pay
full benefits starting in the
year 2034, according to the
report.
Medicare, a vital government
health care plan for
Americans age 65 and older,
will be broke in 2026, a full
three years earlier than previously
expected.
Really, who are you going
to believe? You can also
readily find stories from the
AARP and other sources that
say the contrary exists – that
these two federal programs are on solid
financial footing and it’s all smoke and
mirrors to say otherwise.
Every working American who has
paid into Social Security for the past 40
years certainly expects to see some of
that come back in retirement.
Maybe it makes sense to allow individuals
to forgo paying into Social Security
in the future in favor of some sort
of interest-bearing individual retirement
account. But that’s for another generation
to consider.
Those who have paid into it rightfully
expect to see a monthly check when
they are done working. The government
took the money out with the
promise they wouldn’t end
up in the poorhouse in their
golden years.
It’s doubly depressing
when you read recent surveys
that purport to show
that plenty of people over
age 40 and 50 don’t have
much saved for retirement.
If the graying-at-thetemples
crowd doesn’t have
a six-digit nest egg stashed
away, consider what has
transpired with their finances
over the past decade.
In the simplest of descriptions, the
economy ran into a ditch in 2008. People
saw their retirement accounts lose 40
percent of their value. The stock market
was tanking. Layoffs ensued enmass.
The Federal Reserve stepped in to
ward off collapse of the financial system.
Money became cheap under the
Fed’s quantitative easing stimulus that
dropped interest rates to zero.
The Fed made cheap cash available
to business to prime the economic pump
and kickstart a moribund economy. It
worked and you see that today.
As a result, for a decade you got nothing
for being the frugal saver that was
encouraged and parking your money in a
bank. You lost money when accounting
for inflation.
Other Baby Boomers pulled their
money out of 401K accounts after suffering
big losses, double-digit losses
they could ill afford as they got older.
Some were gunshy and never got back
in the stock market.
There is some humor to be found in a
discussion on saving for retirement, albeit
it’s as ludicrous as it is comical.
Evidently, there is a certain percentage
of the population – about 20 percent
in general and a whopping 59 percent of
Millennials – who think that winning the
lottery later in life is a reasonable way to
fund their retirement.
Pure folly, for sure. But if Social Security
goes broke, I may have to budget
a couple of bucks for the weekly Powerball
drawing.
Steve Lyon is the editor of the Weiser
Signal American. Contact him at

Category:

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