Is Social Security a Silver-Haired Lining?

The Economy is on everyone’s mind more so than ever. We read and hear how things are getting better but Unemployment is still way too high and many are working jobs below their skill level and collecting pay that does not keep up with the Joneses. I have it on good word, though, that Mr. Jones has been out of a job for the last eighteen months as his wife tries to hold the fort down with her meager salary. Jonesy is thinking of asking about that greeter’s job opening at Walmart.

Around the beginning of this century, baby boomers figured we would continue to hold our own in eking out enough of a living to pay current expenses even if we were not putting much away for the future. We also figured that Social Security benefits at age 65 would help when we retired and that Medicare would take care of health payments for our old age ailments and drug prescriptions. But, of course, that all changed.

I’m one of the lucky ones who has not been put into a situation where a mortgage lender is chomping at the bits to foreclose on my property. There is also a conundrum that banks are not quick to foreclose on condo loans in default because they do not want to pay the monthly assessments due to the condo association. There are a lot of condo buildings with several apartments empty, liens against the owners for back payment of dues and worried looks on a lot of association budget planners.

There are those who say Social Security was never intended as a pension but more as a bonus for outliving life’s expectancy. Social Security was signed into law in 1935 and withholding started in 1937 as well as the first payouts. But, at the time, it was only a lump sum distribution. Not until 1940 was it given out as ongoing monthly benefits. Benefits were authorized for spouses and children who never worked or paid social security with-holdings. Even surviving aged parents got a stipend.

The first person to be worthy of this honor was Ida Mary Fuller of Ludlow, Vermont. Miss Fuller retired from her job as a legal secretary in November 1939. She started collecting two months later at age 65. Her initial monthly check was $22.54. She lived another thirty-five years. For the three years that she paid into the program a total of $24.75, she ended up receiving $22,888.92!

It was easy to be generous to retirees back then. Only 222,488 persons received benefits in 1940. This was out of roughly 132 million citizens. By 1960. there were 14.8 million recipients out of a population of 179 million. This represented less than ten percent in the national pension plan and the government’s trust fund for paying out social security was easily self-sustainable.

By 2003, the US population is up to 294 million with 47 million receiving some type of government pension aid, a jump to 16 percent assistance. In December 2010, it is announced that there are more than 308 million people in the US. The percentage of recipients will undoubtedly go up because the population is aging. There are more baby boomers than other segments of natural born Americans and we are creeping up on retirement age. This should continue to be an issue for at least the next thirty years.

To combat this, the Government keeps raising the age that one may start to collect full benefits. What started long ago as 65 is closer to being set at 67. Who knows, maybe fifteen years from now they will tell us that post-baby boomer retirees cannot collect full benefits until age 72.

A delay in receiving full benefits is difficult for those healthy enough to also work because:

1) it’s tough to get a decent paying job,

2) it’s tough to get a job when you are over 50 because the employer can find a younger, cheaper equally qualified person who is less prone to taking sick days and does not cost as much in company paid health insurance premiums,

3) it’s tough to get a job because many have been either shifted overseas or eliminated due to computer efficiency.

There are those who think that the legislators and government workers in Washington don’t care about fixing Social Security because it doesn’t affect them, that they are on some type of federal pension. Guess again. Since 1984, all members of Congress, the President, Vice President, Federal judges and government appointees are covered under Social Security whether they like it or not. Those still in office who started out prior to 1984 in a Civil Service pension have a right to choose if they want to switch but whichever decision they make they have to stick by it forever.

In the next fifteen years, we are either going to see a further reduction in the American Standard of Living or we are going to take drastic steps to resolve forcing those in positions of power to figure things out.

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