#2 Time-related downside: It is not fully funded
Unfortunately, the Social Security program is funded by taxes and by the people who are working. While this sounds like a good way to fund the program, the estimates are not looking good. By 2028, statistics show that the number of people who will be claiming and relying on Social Security benefits will be greater than the number of people paying into the program. There are even estimates that this will happen even earlier than 2028.
While a good part of the national debt of U.S. citizens is towards the Social Security program as they use Treasury securities, to be able to redeem those securities there is a need for funds to exist. This may mean that in the long run, we will be seeing higher tax rates, an increased federal deficit, and other financial consequences that as citizens we will all be feeling.
It may not seem like a big downside, but it may happen that despite paying towards the program all your working years, you will not even up beneficiating from it due to lack of funds.
39 Responses
Every retirement program has it’s ups and it’s downs. Quite frankly, I love the fact that my social security retirement funds are not managed by a private investment fund. Twice in my life, I put significant funds into a 401k plan, only to have it almost disappear during a recession. Somehow, those greedy fund managers always find a way to get paid in spite of badly managing your funds.
I’ve been collecting social security for twelve years now, and if I’m careful, it covers my basic expenses. I love, absolutely love, Medicare and have been able to address assorted health issues without the hassle of negative profit-oriented insurance companies. My health is reasonably good and I expect to live for another 10-15 years and I don’t have to worry about getting medical care. I would be the first person to stand up and shout that we should have Medicare For All.
I’m with you, except I took the advantage plan over the Medicare! They send my $168 withheld from SS deposit to my advantage plan. Get my meds free using generic, very happy there and my deductible max is $4000 compared to 20% Medicare has you responsible!
PS took my benefits at 62 and have never looked back! Older people always told me later years 80+ you don’t need as much anyway. I’m 70 now and that discount has been increased to almost my original option with Medicare out.
Love to know where you’re from. I’m in California and can’t wait to get out
I would like to read the very interesting and useful information about Social Security since I depend on it for most of my expenses.
Its not enough !
As a 75 year old on S S i have seen the Feds supposedly borrow lots of money from SS to cover government wars as well as support other givaways to other countries. The thieves in Washington should have to payback everything they took + interest 😡
They are paying it back with interest. That’s what it means to be invested in government bonds. Money is lent to the government at interest. The average person pays about 1/6 in, their employer pays another 1/6, and the other 2/3 is currently from that interest.
I don’t know if you are aware that anyone working for government don’t pay in,,,they have separate systems,, Sense gov jobs make up at least 40% of the population of jobs & don’t help fund SS,, SS is only for hard wirking fools that pay their salary & retirement which is a lot better than ours 😡 If we were all on the same system including politicians we would all have better retirement.
No down side, just down size!
Even no down side, just UP size
i hear ya all these years ago gov took all that money out of ss never paid anything back those hundreds of millions should b made to pay it back now most have forgotten it make the gov pay it back it was more than enough to pay ss 10 times over
I feel pretty good as NONE of the 7 were news to me. I was aware if them all. I had my husband retire at 62 and work part time. I will be retiring at 66 and 8 months and also working part time.
It would be fully funded if congress would stop spending it.
One thing the government in all its glorious incompetence and unethical practices completely ignores in these articles is the criminal abuse of the system currently in practice. Politicians who arbitrarily make decisions that should cause them imprisonment ignore laws, rules and ethics. Giving SSI benefits to illegal aliens (no, they’re NOT immigrants) who have contributed absolutely nothing to the system is obscene! Giving billions of dollars away to foreign governments ( in most cases our enemies) is criminal, unethical and devisive. Spending untold billions on free medical procedures for perverts who honestly believe their sexual preference over-rides their natural assignment at birth. Claiming men can become pregnant, and destroying the lives of an untold number of children who are much too young to be accountable. Pure frivolous nonsense created by unstable minds. The list could go on and on ad nauseum! We are inundated by lying politicians who constantly warn there is no money for continuing SSI, as they steal it to fund their local works projects or just stuff it in their pockets! Everyone of these incumbent losers needs to have their fat butts shown the door. Our SSI situation is dire because scumbags run our once great nation.
Very well said .
Totally agree! How dare them take money from those of us that have worked our whole life and funded it for them to take out of it to fund people who are not even from here. They need to stop taking our funds. If they refunded all we put in we could take care of ourselves!!!
Amen
Had the government not screwed it up starting with the Reagan administration, it would all be fine.,
Another downside: I have Kaiser Medicare Advantage health care. The quality Regular Kaiser costs about $300 a month, taken out of my SS check. However, there is a Medicare income adjustment factor applied when one upgrades to the Medicare Advantage program – the additional cost is nearly $500 per month!
I have United HealthCare and no extra expense over my $167 Medicare sends them. Super happy and never saw any reason to buy extra coverage
Hi Myles! Thank you for your input!
Michael
I agreed with you 100%.It’s insane after retirement people income changed drastically, how on earth can we afford $500 premium. We need to make our voice heard.
What are the “Downsides?”
Thankful for something I paid into for 50 years and politicians continually stole from. How bout u give me all the money I paid in plus 5% compound you act like we should be thankful for them miss handling our money
Unless you have significant health problems, most advisors suggest taking SS benefits at age 70 to maximize your payout. Yes, your “break even” date will be later, but you need to look at SS as an insurance policy rather than an investment. Will you live long enough to break even? Unfortunately, no one has a crystal ball.
we barely make it to the end of the month some times we have to ask our 2 sons to pitch in so we can put gas in our car to get to all the doctors appointments we have each month I think tose in cetaint states and county needs to help to be able to put food on the table and get out conty to help the ederly with food assistance such as food stamps I only get 23$ and some change our count only tries to give us medicaid but it’s for family planing I am 70 years old I have raised our family and help raise our grand children we need help
I paid over $480 thousand dollars into social security over 45 years
If that money was properly invested it should be easily worth 900 thousand
That would pay my SS for 30 years
I don’t understand why there is a problem
Your negatives are all BS. Failures of the system are the result of the Congress Politicizing the program. The program was set up to benefit WORKERS in their old age, not Welfare beneficiaries. Minimum income to share benefits is a reasonable requirement, as is more benefits for those who pay more in. Benefits were supposed to be tax free. Thanks to Democrats like Biden we are taxed on our already taxed money. LBJ dumped the SS Fund into the general fund to hide his Vietnam excesses. The program was well-conceived – Washington screwed it up and continues to do so to milk the last bit of value from our savings. Damn them all!
When Reagan overhauled SS that’s when it became the bank to pay regular bills and replace with an IOU! Just clarifying your theft of funds!
I read all of these and really see no downside to any, except that SS is not fully funded. You forgot to mention a big reason it is not: that high-income individuals are also exempt from paying the tax on any earnings over the $160,200 threshold in 2023 ($168,600 in 2024). In this day and age, $160,200 is not that high. I don’t believe there should be a threshold. All people, regardless of income, pay in. Period.
This is. Not a benefit.I PAID MY PART EACH PAYDAY FROM THE AGE 16 TILL WHEN I RETIRED. YA”LL TOOK MONEY AND USED IT FOR Other things and did not pay it back and now it is running out You are the blame for it.
I and others who are struggling to find housing (apartments) with low income. I’m disabled and I can’t afford a place of my own. And these 55+ places is nothing but a con to get desperate elders like myself to give them our info to take our savings . So how do we know you are on the up and up?????
The explanation that was written was spot on. Congress needs to do the right thing and strengthen Social Security and Medicare, which would be the the right thing to do, especially since Congress is our representation.The time is now, do what is right for our great nation. Thank you, it is over do. Thank you.
Hello, Richard. Thank you so much for sharing your opinion!
I am glad I moved to Brazil a few years after my retirement. My main concern was my health when I got older. Medicare alone takes a bite out of your SS benefits and doesn´t cover you completely. Added private insurance is expensive. In Brazil, you have an option. Free health care includes unlimited doctor visits, emergency visits, free ambulance service, operations, cataract operations, hearing aids, and organ transplants. Yes, they have some waiting lines, but it´s free. Private health care exists of course and is also affordable with my US Social Security income, but I use the government-sponsored free healthcare because the doctors are the same as the private ones.
I know that is news to most Americans because the US is always concerned about its image and making the world believe that we are the best and biggest. Brazilians always admire me when they find out that I am an American and tell me about their wish to go to America. I tell them that visiting the US is great, but living there is not as easy as they dream.
Hello Alexander. Wow, it sounds like living in Brazil is a dream!
And you didn’t even mention the “windfall tax” where they steal about half of your monthly SS benefits you paid into (FICA) for years if you switched to a job with a private pension. I already earned the credits to receive SS but will have my benefits cut in half because my teaching jobs deducted money from my paycheck for a private pension instead continuing FICA. I don’t even get the full SS already paid for years.
Hi Carla, thank you so much for the tip. We’ll be sure to include it next time. And we’re truly sorry this has happened to you.
If your love one dies you only receive 255 for death benefits. But if they die before the first of the month your not able to receive the ss of your love one.i think something is wrong with that picture because you are always a month behind from your ss benefits.
We’re so sorry to hear about your situation. It must be so frustrating!