Friday, August 16, 2013


The Social Security Board of Trustees released its annual report a few weeks ago on the financial health of both the retirement and the disability trust funds.

The report projected that the retirement trust fund will be depleted in 2033, although I have read other estimates placing this in 2026.

A few days prior to this announcement, Donald Fuerst, senior pension fellow at the American Academy of Actuaries, testified before the U.S. Congress about Social Security's pending shortfalls. 

He said that in 1940, when the new Social Security Administration began paying monthly retired-worker benefits, the retirement age was 65. At that time, workers who survived to age 65 had a remaining life expectancy of 12.7 years for men and 14.7 years for women. 

By 2011, life expectancy at age 65 was 18.7 years for men and 20.7 years for women, an increase of six full years for both.

The bottom line: If something doesn't change, we won't have enough money to pay the Social Security that is promised, a retirement planning disaster.

Fuerst offered Congress several suggestions for fixing this problem. His most controversial idea is probably raising the minimum age for collecting Social Security from 62 to at least 64.

Here's what he'd also do to make an increase in retirement ages less painful for workers:

Gradually phase in any change over an extended period of years, even decades, to allow for more time for society to adapt to the new work-life reality. "Give people time to plan and prepare. You wouldn't want to change it for someone who was planning to retire the next year. None of us would consider that fair," Fuerst says.

Reduce benefits for higher-paid workers. "Wealthier socioeconomic groups recently show more longevity improvements than poorer socioeconomic groups," Fuerst points out.

Cut or eliminate the wage tax for both employers and employees for people between ages 62 and full retirement age. It would give an incentive to both groups to keep older workers on the job.

Will a plan this complex and drastic ever wend its way through Congress? Fuerst thinks it should, but he isn't optimistic. "It isn't going to be easy; there are too many competing interests," he says.

There is no Constitutional authority for this entitlement program, and the decline in birth rates since the end of the baby boom has made it impossible to sustain this program.

While I think it inherently unfair to have taken money from someone their whole working life under the premise they'd get it back, it is probably realistic that higher-income workers and workers who saved for their retirement will get screwed in an effort to keep the program afloat for low income workers and people who bought new BMW's that they could not afford.

Every time our president says he plans to redistribute wealth, this is what he means.

Low income Americans are foolish enough to think there is enough wealth to elevate them to Bill Gates status.

The reality is, they'll get a new iPhone every few years (if they renew their plan) and will be able to afford the better brand of cat food in retirement.

And the rich will still be rich.

That's how it works.

Social Security cannot be saved, so what needs to happen is politicians get serious about how to address this serious problem.

But they won't. 

They will worry about re-election.

"I've got problems of my own,
Like staying fat"
-Utopia, Swing To The Right

I recommend you buy precious metals and bury them in your yard. That way, Obama can't find it to redistribute it.

Otherwise, stock up on cans of the Friskies turkey dinner with cheese (shredded). My cats love it.


  1. The alternative, as I see it, to Friskies (because I don't see the government fixing this problem, either) is that everyone needs to learn how to grow their own food. The government has been the farmer not to farm for years. Yeah, that makes no sense. I am not going to rant about that right now. Instead, I am going to suggest that everyone, while they are young enough to do it, learn to garden. Become a part of a gardening group. Take the reins of your future by learning how to grow your own food. NO ONE wants to be eating cat food any time.

    Not everyone can afford to buy gold at the price that it is selling at these days. People can make time to learn how to plant a vegetable garden. Buy the seeds/plants. And plant a fruit tree(s) in your yard, conducive to the climate of your area, that will yield fruit. Accept right now that food will be an issue for you. There are other ways around this nightmare. It sure is easier to start learning something new when you are young vs. old.

    On the deeper message here: socialism has never worked. Everyone who thinks they will get richer by this redistribution of the wealth is delusional. Each time they talk about it, it isn't the "wealthy" they are stealing from, it is the middle class. All that is happening is that the dividing line between very rich and very poor is getting wider. And who is benefiting? The very rich in government (and the international bankers) who sold this plan in the first place. First lesson in economics: there is no such thing as a free lunch.

    1. I don't know cats will start begging for that turkey food at 2pm, knowing I won't feed them until 5 or 6....

      It must be good stuff!

      Actually, better than gold would probably be old silver dollars (smaller denominations), but you are self sufficient as people can be, the better.

      I may be able to pull off a garden, but there's no way I could butcher an animal.

      And you have so nailed the whole Socialism process, but yet the poor in America seem to think this time it will be different.

      There have always been rich and poor....America was the first country that I know if with a solid middle class AND the ability to improve your lot.

      That dream is shot.


  2. Social Security is just the governments way of reminding us about the definition of insanity. They keep trying the same thing over and over, each time expecting a different outcome, or at least their hoping we do. Come to think of it, apparently most Americans do.