Why We Should Prepare for Retirement.
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- Date Submitted: 05/15/2011 05:56 PM
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Retirement and Social Security
COM/156
April 3, 2011
Alison Bonham
Retirement and Social Security
Social Security has been a huge debate for the last few years. Some argue that it will no longer be around, and some say it will be there and working properly. Published reports and discoveries have sais with no change made to the program will run out of money by 2037 (O’Connell, 2011, p.1). Currently there is $2.6 trillion in Social Security’s trust fund, and when it runs out in 2037, benefits will be reduced by 30% (Why Social Security must change now). Nearly 30% have savings of less than $1,000 and more than half of Americans have less than $25,000 (Willis, 2011, p.1). Social Security will not be able to provide for Americans through their “Golden Years.”
Many wonder how exactly Social Security work, 7.65% of Americans gross income is withheld from their checks to pay the benefits of the people currently collecting benefits. The employer also pays 7.65% to Social Security. In 1935, when Roosevelt signed the Social Security Act into law, lawmakers had no clue of the future baby boom to come. If population was to rise steadily, Americans will not be faced with this problem today. Social Security does not only pay benefits to retirees but also people with disabilities, survivors, and supplemental security income (SSI) (How does the Social Security system work?) There have been many ideas to help Social Security in the future years. Tax increases, decreased payouts and rising full retirement age to 70. Some say a “fix is not painless, but it is relatively simple.” “If we increase the retirement age to 70 starting in 2013, employ means testing to adjust benefits in steps for those who make over $250,000, who can afford reduced benefits without hardships, change the cost-of-living adjustment (COLA) to cost based and not wage based, and raise the income on which FICA payments are made” (Mariotti, 2011, p.2).
These changes that can be made are simple and will not...
COM/156
April 3, 2011
Alison Bonham
Retirement and Social Security
Social Security has been a huge debate for the last few years. Some argue that it will no longer be around, and some say it will be there and working properly. Published reports and discoveries have sais with no change made to the program will run out of money by 2037 (O’Connell, 2011, p.1). Currently there is $2.6 trillion in Social Security’s trust fund, and when it runs out in 2037, benefits will be reduced by 30% (Why Social Security must change now). Nearly 30% have savings of less than $1,000 and more than half of Americans have less than $25,000 (Willis, 2011, p.1). Social Security will not be able to provide for Americans through their “Golden Years.”
Many wonder how exactly Social Security work, 7.65% of Americans gross income is withheld from their checks to pay the benefits of the people currently collecting benefits. The employer also pays 7.65% to Social Security. In 1935, when Roosevelt signed the Social Security Act into law, lawmakers had no clue of the future baby boom to come. If population was to rise steadily, Americans will not be faced with this problem today. Social Security does not only pay benefits to retirees but also people with disabilities, survivors, and supplemental security income (SSI) (How does the Social Security system work?) There have been many ideas to help Social Security in the future years. Tax increases, decreased payouts and rising full retirement age to 70. Some say a “fix is not painless, but it is relatively simple.” “If we increase the retirement age to 70 starting in 2013, employ means testing to adjust benefits in steps for those who make over $250,000, who can afford reduced benefits without hardships, change the cost-of-living adjustment (COLA) to cost based and not wage based, and raise the income on which FICA payments are made” (Mariotti, 2011, p.2).
These changes that can be made are simple and will not...