Today we are talking about social security. We admit, not the sexiest of topics, but something we should all pay attention to. Where does the money go and why is it running out?
The Social Security Act, signed into law by President Franklin D. Roosevelt in 1935, created Social Security, a federal safety net benefits for victims of industrial accidents, unemployment insurance, aid for dependent mothers and children, the blind, and the physically handicapped.
FDR asked for a social security bill in Jan→ it had all the private people opposition → but passed in August the same year?! Where did our efficiency in legislation go??
Ronald Reagan created the FICA tax to supplement the long term outlook for Social Security in the 80s.
The Trust Fund represents a legal obligation of the federal government to program beneficiaries. Under current law, when the program goes into an annual cash deficit, the government has to seek alternate funding beyond the payroll taxes dedicated to the program to cover the shortfall. This reduces the trust fund balance to the extent this occurs. The program deficits are expected to exhaust the fund by 2034.
QUICK SOCIAL SECURITY FACTS:
Social Security supports tens of millions of Americans, providing essential benefits to help them make ends meet in retirement or if they become disabled.
Annually, Social Security gives those receiving benefits a cost-of-living increase in the size of their monthly checks. The amount varies from year to year based on inflation figures→ 1.6% starting at the beginning of 2020.
Research shows the program’s benefits will start to exceed its tax collections in 2020, and the program will deplete its $2.9 trillion reserve fund in 2035 if no action is taken.
As politicians suggest “fixing,” cutting, or even expanding Social Security benefits through a variety of methods (primarily focused on increasing taxes on the wealthy), it is clear the public should expect either smaller benefits, higher taxes or both in the future as the government looks to extend the runway for a program born in 1935 that roughly four in 10 Americans rely on as their sole source of retirement income.
The average Social Security benefit was $1,503 per month in January 2020. The maximum possible Social Security benefit for someone who retires at full retirement age is $3,011 in 2020. However, a worker would need to earn the maximum taxable amount, currently $137,700 for 2020, over a 35-year career to get this Social Security payment.
Roughly 40% of Americans rely soley on Social Security for retirement at this moment in time.
Social security for people who choose not to get married to their partners (as many young people are doing) AND for women who take more time off during their working life to care for family members are hurt the most.... Making sense when Social Security was created in the 30s, when it was a white male dominated framework and why we need diverse representation so that the new systems we put in place are not tailor made to white males.
Social Security is an important income source for 7 in 10 recent retirees. According to Secure Retirement Institute research, it makes up 37% of their total income on average.
Bernie Sanders ...
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