- Over the next 75 years, Social Security’s shortfall is equal to about 0.7 percent of GDP. Source (PDF).
- For the average 65-year-old retiring in 2010, Social Security replaced about 40 percent of working-age earnings. That “replacement rate” is scheduled to fall to 31 percent in the coming decades. Source.
- Social Security’s replacement rate puts it 26th among 30 Organization for Economic Cooperation and Development nations for workers with average earnings. Source.
- Without Social Security, 45 percent of seniors would be under the poverty line. With Social Security, 10 percent of seniors are under the poverty line. Source.
- People can start receiving Social Security benefits at age 62. But the longer they wait, up until age 70, the larger their checks. Waiting to 66 means checks that are 33 percent larger. Waiting to 70 means checks that are 76 percent larger. But most people start claiming benefits at 62, and 95 percent start by 66. Source.
- Raising the retirement age by one year amounts to roughly a 6.66 percent cut in benefits. Source.
- In 1935, a white male at age 60 could expect to live to 75. Today, a white male at age 60 can expect to live to 80. Source.
- In 1972, a 60-year-old male worker in the bottom half of the income distribution had a life expectancy of 78 years. Today, it’s around 80 years. Male workers in the top half of the income distribution, by contrast, have gone from 79 years to 85 years. Source.
May 15, 2011
Ezra Klein On Social Security
From Ezra Klein writing in the Washington Post:
Subscribe to:
Post Comments (Atom)
4 comments:
Do you think we will have any by that time?
"In 1935, a white male at age 60 could expect to live to 75"
Why is that relevant?
If blacks have a shorter life expectancy,how should that affect their benefit payments?
The same logic would apply.
We need to be more careful stewards of these dollars since they represent such a large portion of people's retirement income.
The first step we must take is ensure that when the trust fund is tapped, that new money need not be raised.
If SS is to be a retirement plan, it should function as such.
Appropriate retirement plans have trust funds which serve as actual reserves.
When the trust fund is tapped, the reserve is simply liquidated, for it has been pre-funded and left intact with valuable real long-lasting assets.
All we have now is simply numbers in the SS trust fund, which allows new money to be raised without an appropriation.
When we are running deficits, that new money is raised in the form of increasing the debt held by the public.
Don Levit
The best way to shore up the retirement fund is to reform the disability system so fewer undeserving individuals receive benefits. A good start would be eliminating the inappropriate age-based presumptions at 50 for sedentary work and 55 for light work. Every dollar in disability benefits inappropriately paid out is one less dollar for the truly disabled and for the retired.
Post a Comment