Thursday, January 21, 2016

Social Security May Be at Risk of Cuts After the November Elections

Alicia Munnell writes for MarketWatch:
 Social Security may be at risk after the November elections...The stage is being set for benefit reductions. Cutting benefits would be a huge mistake, given that half the private sector workforce does not participate in an employer-sponsored retirement plan and that those lucky enough to participate in a 401(k) have combined 401(k)/IRA balances of $111,000 as they approach retirement. Therefore, it is very important to take a hard look at the emerging characterization of the Social Security program. 
Munnell is not just a columnist spouting off.  Every four years, Social Security establishes a Technical Panel to evaluate the Trustees’ projections.  In 2015, she chaired the Panel.

She writes that the 2015 panel suggested:
A more rapid mortality improvement, which means that people will live longer and receive more total Social Security benefits; lower fertility, which reduces the population at working ages relatively to the elderly population; and lower interest rates, which mean that revenues and benefits are discounted by a lower number. These cost-increasing changes raised the 2.68 percent deficit in the 2015 Trustees Report to 3.42 percent. 
The Congressional Budget Office has an even higher deficit number: 4.37%.

Bottom line: Social Security is getting deeper and deeper into the red. Once the elections are over cuts in benefits are a very real possibility.

Anyone counting on benefits based on current schedules is going to be in for a rude surprise.



  1. The "funds" are all Treasury bonds. The Fed will keep it afloat.

  2. Social Security Railroad retirement and the Federal retirement programs were looted in the 1980's, since then they, government , have put in IUO's. Clinto did his thing with more printed money

  3. Wait a min, so the political orientation most concerned with earth's population overload designed a scheme that requires a constant increase in the level of population to be sustainable?

    Also, isn't a there a name for a scheme that requires a constant level of increase in new buyers to pay out the old ones... patsy .... pastry ... potpourri.... PONZI!!

  4. So why are illegal aliens getting social security even if they NEVER paid into it? Why aren't the just being deported? This is beyond outrageous.