Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Trump and Coronavirus Pandemic Final US Catastrophe 2021 - 19th Jan 21
How To Find Market Momentum Trades for Explosive Gains - 19th Jan 21
Cryptos: 5 Simple Strategies to Catch the Next Opportunity - 19th Jan 21
Who Will NEXT Be Removed from the Internet? - 19th Jan 21
This Small Company Could Revolutionize The Trillion-Dollar Drug Sector - 19th Jan 21
Gold/SPX Ratio and the Gold Stock Case - 18th Jan 21
More Stock Market Speculative Signs, Energy Rebound, Commodities Breakout - 18th Jan 21
Higher Yields Hit Gold Price, But for How Long? - 18th Jan 21
Some Basic Facts About Forex Trading - 18th Jan 21
Custom Build PC 2021 - Ryzen 5950x, RTX 3080, 64gb DDR4 Specs - Scan Computers 3SX Order Day 11 - 17th Jan 21
UK Car MOT Covid-19 Lockdown Extension 2021 - 17th Jan 21
Why Nvidia Is My “Slam Dunk” Stock Investment for the Decade - 16th Jan 21
Three Financial Markets Price Drivers in a Globalized World - 16th Jan 21
Sheffield Turns Coronavirus Tide, Covid-19 Infections Half Rest of England, implies Fast Pandemic Recovery - 16th Jan 21
Covid and Democrat Blue Wave Beats Gold - 15th Jan 21
On Regime Change, Reputations, the Markets, and Gold and Silver - 15th Jan 21
US Coronavirus Pandemic Final Catastrophe 2021 - 15th Jan 21
The World’s Next Great Onshore Oil Discovery Could Be Here - 15th Jan 21
UK Coronavirus Final Pandemic Catastrophe 2021 - 14th Jan 21
Here's Why Blind Contrarianism Investing Failed in 2020 - 14th Jan 21
US Yield Curve Relentlessly Steepens, Whilst Gold Price Builds a Handle - 14th Jan 21
NEW UK MOT Extensions or has my Car Plate Been Cloned? - 14th Jan 21
How to Save Money While Decorating Your First House - 14th Jan 21
Car Number Plate Cloned Detective Work - PY16 JXV - 14th Jan 21
Big Oil Missed This, Now It Could Be Worth Billions - 14th Jan 21
Are you a Forex trader who needs a bank account? We have the solution! - 14th Jan 21
Finetero Review – Accurate and Efficient Stock Trading Services? - 14th Jan 21
Gold Price Big Picture Trend Forecast 2021 - 13th Jan 21
Are Covid Lockdowns Bullish or Bearish for Stocks? FTSE 100 in Focus - 13th Jan 21
CONgress "Insurrection" Is Just the Latest False Flag Event from the Globalists - 13th Jan 21
Reflation Trade Heating Up - 13th Jan 21
The Most Important Oil Find Of The Next Decade Could Be Here - 13th Jan 21
Work From Home £10,000 Office Tour – Workspace + Desk Setup 2021 Top Tips - 12th Jan 21
Collect a Bitcoin Dividend Without Owning the King of Cryptos - 12th Jan 21
The BAN Hotlist trade setups show incredible success at the start of 2021, learn how you can too! - 12th Jan 21
Stocks, Bitcoin, Gold – How Much Are They Worth? - 12th Jan 21
SPX Short-term Top Imminent - 12th Jan 21
Is This The Most Exciting Oil Play Of 2021? - 12th Jan 21
Why 2021 Will Be the Year Self-Driving Cars Go Mainstream - 11th Jan 21
Gold Began 2021 With a Bang, Only to Plunge - 11th Jan 21
How to Test Your GPU Temperatures - Running Too Hot - GTX 1650 - Overclockers UK - 11th Jan 21
Life Lesson - The Early Bird Catches the Worm - 11th Jan 21
Precious Metals rally early in 2021 - 11th Jan 21
The Most Exciting Oil Stock For 2021 - 11th Jan 21
Financial Market Forecasts 2021: Navigation in Uncharted Waters - 10th Jan 21
An Urgent Message to All Conservatives, Right-Wingers and Patriots - 10th Jan 21
Despite Signs to the Contrary, Gold Price at or Near Top - 10th Jan 21 -
Ultimate Guide On The 6 Basic Types Of Index Funds - 10th Jan 21
Getting Vaccinated at TESCO - Covid-19 Vaccinations at UK Supermarket Pharmacies and Chemists - 10th Jan 21
Cheers for the 2021 Stock Market and These "Great Expectations" - 9th Jan 21
How to Plan Your Child With Better Education - 9th Jan 21
How To Find The Best Casino - 9th Jan 21
Gold Is Still a Bargain Buy - 8th Jan 20
Gold Price Set to Soar as Hyperinflation Looms - 8th Jan 21
Have Big Dreams? Here's How to Pay for Them - 8th Jan 21
Will the Fed Support Gold Prices in 2021? - 8th Jan 21
Stocks trading strategies for beginners - 8th Jan 21
Who is Buying and Selling Stocks in 2021 - 8th Jan 21
Clap for NHS Heroes 2021 as Incompetent Government Loses Control of Virus Again! - 8th Jan 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

The Other Looming $7 Trillion Financial Crisis: Social Security

Politics / US Economy Mar 04, 2009 - 09:49 AM GMT

By: Money_and_Markets

Politics Best Financial Markets Analysis ArticleNilus Mattive writes: My new retirement report just went to press yesterday, so the material is fresh in my mind. And while I can't share the contents with you here in Money and Markets , there is one topic in that report that I want to talk about today.


It is a financial crisis that will affect nearly all of us in profound ways. And it's been pushed to the backburner given all the other financial shenanigans happening today.

I'm talking about Social Security, of course.

Let me tell you …

The Problems Go Back to the Beginning of the Program!

When Social Security was first instituted in 1935, it covered about half of the population. Many teachers, nurses, librarians, and other workers were excluded from coverage. What's more, the average life expectancy was about 60.

Today, Social Security covers virtually everyone. The average American is living to age 76.

And although the initial 1937 payroll tax rate of 2 percent (split between employer and employee) has risen to a combined 15.3 percent (including Medicare taxes), the system still isn't bringing in enough money to cover everyone.

Remember, Social Security is a “Pay-As-You-Go” system … meaning money comes in and goes out fluidly. That poses a big problem, especially with a huge number of baby boomers getting set to retire over the next decade.

A smaller pool of contributors paying for a larger and longer-living group of recipients is a recipe for disaster!

In fact, the program is expected to begin taking in less money than it pays out starting in 2017. That's just eight years from now!

And by 2041, Social Security will only be capable of paying out 78% of promised benefits.

As of right now, you can expect the system to continue paying out full benefits through 2041.

But that's only because Social Security will tap its “trust fund,” a bunch of IOUs from various government agencies that borrowed money back when the program was running a surplus.

President Obama has few options when it comes to Social Security fixes ...
President Obama has few options when it comes to Social Security fixes …

It's not like these other government agencies actually have the money on hand, either. So they'll borrow to pay back the money they owe Social Security.

By the way, we're talking about a $7 trillion shortfall!

In light of all the other bailouts and money pumping happening right now, you can see just how bad the situation really is.

How Might Washington Repair Social Security?

It's simple, really. There are only two ways to solve the Social Security crunch:

A. Pay out less benefits

B. Get more money into the system

So far, President Obama's stated preference is “B.”

Currently, a combined 12.4 percent of income — up to a $102,000 cap — is put in for Social Security.

In the past, Obama has said he is not in favor of removing this cap. Instead, he would like to enact an additional 2 percent — 4 percent tax on anyone earning more than $250,000.

Some insiders have suggested this plan, if passed, wouldn't take effect until ten years from now. And even if it took effect immediately, the Tax Policy Center estimates it would add $396 billion over 10 years.

In other words, it's a good start at best. More changes will be needed. And you can bet that lower benefits and higher taxes will both figure into the final solution.

In my opinion, that's all the more reason for you to save as much as you can for your own retirement AND to take advantage of as many tax-sheltered accounts as you can.

Best wishes,

Nilus

P.S. Even though Social Security is in big trouble, I do not expect anyone nearing — or already in — retirement to be adversely affected.

In fact, I have found at least five ways for you to potentially boost your Social Security payments. All the details are in my retirement report that went to press yesterday.

If you didn't get your copy, click here to get your copy of “The Weiss Guide to Worry-Free Retirement Profits” immediately .

This investment news is brought to you by Money and Markets . Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com .

Money and Markets Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules