Of course Social Security is essential 

Regardless of your political point of view or your skills in demonstrating that Social Security is a poor financial investment, the program is essential and here to stay.

Most Americans have a limited understanding of the program while nearly all Americans will rely, at least partially, on Social Security income in retirement.

Unfortunately, the program is a major political football. It is virtually impossible for a politician to suggest any changes to the program without being vilified. As a result we get nowhere.

Information given to Americans is incomplete, misleading or simply false. Advocate groups like the one mentioned below don’t help matters. They attack politicians in the quest for more and nothing else.

This particular group is so politically left as to be incapable of objectivity or sometimes truth. Take a look at its Twitter posts.

Source: About Us – Social Security Works

Nevertheless, we need to fix the SS trust, and we need to tell Americans the truth about what SS is and is not, can and cannot do. Needless to say the “I’m entitled” “I earned” point of view regarding SS benefits doesn’t make telling the truth any easier.

Time to review everything we know and think we know about Social Security.


  1. greglee – What I mean by changes is – zero increase in benefits, above planned COLAs, like many D’s want, or say they want to get votes.
    I do think Congress has to fix the upcoming 20% shortage in 2035. They can do this, by removing the wage cap and tax all income, without increasing the benefit for high earners, by giving the high income worker a deduction on their federal income taxes, Reducing COLAs by 1% for anyone with income above the poverty level. Tax 50% of social security income, for all. Increase the tax rate that employers pay on each worker to cover the shortage. Or, what I think Congress will do, is just borrow the 200 billion dollars that the system will need to pay all Social Security benefits. The Congress can use any combination of adjustments to Social Security funding to ensure planned benefits are paid. Even if Congress does nothing and there are benefit cuts, I for one will have already received $278,204 in total Social Security benefits, about three times more than was paid in Social Security taxes during my working years. Adjusted for inflation in 2018 dollars, and I am OK with that. We pay taxes all the time to fund the common programs that our country has put into place and many see no direct benefit. People with property continue to pay property taxes that fund the school system long after they no longer have children in school, some never had any children in school. Social Security is no different, as most people get everything that was paid in Social Security taxes back in 8 to 10 years.

    Liked by 1 person

  2. As a condition of our state jobs, my wife and I had to each pay into both the Social Security system and our state retirement systems. I used to hate this, for decades, until the dot-com crash. I had thought I could do much better investing that money myself. But then the state trust fund that supported state pensions lost a substantial amount in the early 2000s.

    If that had been my own money that was lost, I could never have made up for the loss. As it was, though, it was the state’s responsibility to replenish the trust fund. That was painful, but it wasn’t my personal pain — I didn’t lose any of my savings at all, nor did retired teachers, police, firemen, or judges (who share the same trust fund).

    Similarly, Social Security. If some vicious black swan comes swimming, it won’t be my personal responsibility to fix the trust fund. It is implausible to imagine that politicians will let SS payments to millions of retired voters fall precipitously.

    Liked by 1 person

    1. Never fear, no politician will allow SS to lower payments. Nobody lost money in the dot.com crash or any crash UNLESS they sold at a loss and didn’t stay invested for the long term. You would not have had to make up any loss, the market would do it for you. The state had no need to replenish the fund, but to maintain a certain funding level (which most states ignore). When the market recovered as it did, the state would reduce is contributions.

      I retired in 2010 and since then have been forced to take four required distributions. And yet today my account is worth twice what is was on the day I retired. Not one penny of that from contributions.

      Liked by 1 person

      1. I don’t understand your reasoning about the trust fund somehow getting replenished all by itself. The fund has to pay out pension benefits for all state retirees, month by month. If it loses capital in a crash, clearly just because the Market recovers, the fund need not ever do so.

        Since I also retired in 2010 also, I calculated how my present portfolio compares with that in 2010, not counting any additions or subtractions of capital in the 10 year interval. (I hope I did it right.) Now my portfolio value is 3.89 times as much as it was in 2010.

        Liked by 1 person

      2. A pension fund assumes a certain rate of return over 30 years. Typically 7% on average. And a plan is supposed to maintain a certain level of funding, generally not less than 80% of liabilities. Most states don’t meet that though. So, if the market drops either the funding level drops (most common) or extra contributions are made, most states don’t have money to do that. But as the market recovers the fund may become overfunded and no contributions are made for some period. You might want to look up your states funding level.

        Liked by 1 person

      3. I don’t see the relevance, but the trust fund’s funding level is currently 55.2%. In 2000, as I recall, it was above the nominal full funding level of 80% but dropped substantially below that due to the dot-com crash. The state was sued to increase contributions to replenish the fund, which it was doing before covid19 (some detail of what I reported above). Now, tax revenues are way down, and I don’t know what the state is going to do, since it doesn’t have the money to replenish the fund, as it was doing before covid19.

        But as I said above, the fund must somehow be replenished if the state is to meet its pension commitments in the long run. There is no magic way of sitting back and waiting for the fund to heal itself, as you seem to imagine. And as I said earlier, if I had been saving personally for my retirement instead of relying on the state, I would have been up the creek without a paddle.

        Liked by 1 person

      4. If a private pension were funded at that level it would be sanctioned by the Feds. Your state like many mismanage their funds, often promising higher benefits than taxpayers can afford. The problem was caused not by dot.com, but by chronic underfunding and/or higher than prudent earning assumptions which is also typical of state plans. If there were prudent ongoing funding, market dips would be investing opportunities. The fund would indeed heal when markets recover IF there were ongoing actuarial recommended funding before and after. I managed pension plans for decades and I sat on several commissions on pensions for a state so I am familiar with this. If you had been saving yourself and you steadily saved through ups and downs in the market, you would be just fine assuming you didn’t try to manipulate things going in and out of funds. Look at a long term chart for the S&P 500 and you will see what I mean.

        Liked by 1 person

      5. Even after this lengthy discussion, I guess I have not made myself clear. You may be right that Hawaii state may not have manage its pension fund the best way. What actually happened was that around 2000, the pension fund was so healthy that the legislature thought it could afford to divert money to other uses, because of course the state has many demands on its resources. Well, because of dot-com, that turned out badly. In good times, ideally, we should husband resources, since bad times may follow.

        But who among us never makes a mistake? My overall point is that if I am managing my own retirement fund and things go badly, for whatever reason, since I am no longer working, I have a real problem. However, Hawaii state as fund manager has resources that I do not. It can divert tax moneys from other uses, it can raise taxes, it can reduce its expenses by firing some state workers. Not happy courses of action, but feasible.

        It is unlikely that state pensioners like me will suffer reductions in pension income. For one thing, the integrity of the pension trust fund is protected in the state constitution. For another, state legislators will be reluctant to let their very own pensions be reduced. Individuals managing their own retirement funds cannot achieve this level of safety.

        Liked by 1 person

      6. But what you seem to not recognize is that when things go bad, they don’t stay that way, they go back up. Look up a 50 year chart on the S&P. A person self funding their retirement uses a portion of the funds each year. Typically about 4% to have a good chance of not running out of money and that accounts for market dips. A wise person would also have a cash reserve to use when there is a dip so none or only a portion of retirement funds are used on a dip. In addition, in retirement only 50-60% of assets should be in stocks, the rest in bonds and the like.

        Liked by 1 person

  3. Before we do any changes to Social Security, or any other program, the federal government needs to get its act together and stop sending money to people who no longer qualify for the payments. And, also figure out a better way to recoup, the incorrect payments. The problem with these overpayments is, it is not their money, so the government employees and the administrators have zero incentive to stop it. Yet I am sure if the bank took $5 extra out of a personal account, they would be on the phone, as soon as they discovered the mistake. Unfortunately, it is not $5, but billions of dollars lost each and every year. It sure would be nice to have an extra $2.3 Trillion dollars in the government trust funds, to pay future retirees.

    See the article below.

    Feds Admit $2.3 Trillion In Improper Payments since 2004.



    1. If you wait to fix the Social Security system until it is administered without waste and without error, you’ll wait forever. Because that’s never going to happen. So that is not a sound plan.

      Liked by 1 person

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