Archive for April 25th, 2011


S.S. Retirement: Don’t Even Touch It

The right-wingers are once again talking about tampering with the Social Security Retirement System and they need to be stopped.

It is very troubling to hear politicians and media pundits discuss all forms of Social Security, in the same breadth, as if they were all the same. Since the programs are as different as night and day, the words used to describe them must be clear. Medicare, Medicaid and SS Disability have legitimate issues that need correction, but the retirement plan does not. So there is no confusion or ambiguity, everyone should use the word retirement when discussing what the elderly receive when they stop working.

Social Security retirement, created in 1935, works pretty well, and needs no major adjustment, or privatization. With every paycheck, .0765 is deducted and paid to the government. Of that sum, .062 is applied to the Old-Age Trust Fund, and 0.145 is paid to Medicare. Employers are required to make matching payments.

Social Security retirement works, because it is universal and mandatory. The deal is, throughout our work lives, we all pay into the system, and we all receive benefits when we stop working. It’s simple to understand and easy to administer. If you retire early at age 62, your monthly benefits are reduced for the rest of your life. If you wait for full retirement at age 65 or 66, you receive the normal sum. Your benefits are based on your average earnings.

I dug out my old W-2s from over the years and added up all of my personal contributions to the retirement trust fund. I then doubled them to account for the matching employer contributions. I then divided that sum by the estimated monthly payment Social Security has told me I will probably receive upon retirement. The bottom line is there is roughly enough money in the trust fund, from principle alone, to cover payments through life expectancy.

The very idea of privatization is foolish and reckless. If the program was privatized, and the money was placed in the hands of private sector funds, there is no guarantee sound investments would be made, or that the money would not be lost. The recent Great Recession of 2008 is a perfect example of how the stock market can take a dive.

The reason we need to maintain a mandatory government-run retirement trust fund, is that many Americans earn so little, they are unable to save for their golden years. If the deductions were not mandatory, those on the margin, which is about half the population, would spend all of their paychecks as soon as they were received. They would not be able to build up any savings on their own, because they have so little discretionary income.

Since most people are also living longer now, they cannot continue working, until they die. Modern American medicine is keeping men alive for 75.6 years, and women for 80.8 years. Most stop working as they turn 62 or 65, because they are simply physically or mentally unfit to continue. With no income, most absolutely need their SS retirement benefits to survive.

When it comes to the retirement system, I just don’t see a serious problem. The next time a right-wing politician tries to scare you by saying the money you paid into the Old-Age Trust Fund is not there, ask him for the names of those who stole it, because they need to be prosecuted for theft. Ask for the names of the irresponsible politicians who voted to take the country to war, but lacked the courage and responsibility to raise taxes to pay for it. If they think they can cover the cost of their wars with our trust for retirement, they should be warned: Don’t even think about it!