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Subscribe to RSSIf you are among the optimists who believe that Social Security will still be around when you retire, you likely want to get a sense of how much money you’ll be able to count on in your golden years.
And if you’re among the more pessimistic types – and who wouldn’t be after new congressional projections showing the fund will be drained by about 2037 - you may still want to know how much you’re missing out on.
The Center for Economic and Policy Research has created a handy calculator to do just that.
The calculator actually has two elements.
The first part estimates the average family retirement income in your county, based on data from the U.S. Census department.
The second part allows you to enter in a few personal details, such as how much you make and how much you owe on your mortgage. Then, it calculates how much your monthly Social Security and other income could be upon retirement.
One nice touch: The calculator automatically converts into 2010 dollars, so you get a good sense of how much spending power that income will give you.
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Here's a quote from a recent Congressional Budget Office long-term look at the Federal Budget:
"Interest payments, which absorb federal resources that could otherwise be used to pay for government services, currently amount to more than 1 percent of GDP; under this scenario, they would rise to 4 percent of GDP (or one-sixth of federal revenues) by 2035."
This is the CBO's best case scenario. Under their worst case scenario, the interest payments on the debt rise to one-third of federal revenues. At that point, it is highly unlikely that Social Security, Medicare and Medicaid will exist in their current forms.
Here's a summary of the CBO's Long-term Budget Outlook and how interest payments on the debt will affect our lives:
http://viableopposition.blogspot.com/2011/01/interesting-look-at-interest-on-us-debt.html
look this is simple raise the income cap
There is no income limit on medicare and it is also projected to go broke. If you raise the income limits you need to raise teh maximum benefit level proportiantely to beeven close to fair.
It depends on how long you will live and how much you have built into the plan. Don't count on living in retirement just on Social Securiy. If you do not have a adequate source of other retirement monies you will be doomed.
If you own your own mortgage-free home at retirement in low property tax area, you can barely get by in retirement on SS, assuming you worked to 62-66 on an average income.
If you have the home and a small pension or other income source that represents 50% of SS, you can have a decent retirement.
If you have the home and a larger pension or other income source that represents 100% or more of SS, possibly including employer-subsidized health insurance, you can have a very enjoyable retirement, including much travel, etc.
My mother, who passed away in 2003, had a small pension from SCM. My recently retired cousins have pensions from Conoco, GE, Otis Elevator, and the National Security Agency. My next door neighbor has a pension from Northrup (Westinghouse). I have a small teacher's pension. Our situation is envied by many of our friends and relatives who don't have such things.
Pensions are become more and more rare and 401k's are an awful thing to replace them with since most people aren't qualified to manage retirement funds, the fees are unconscionable, and the stock market can take half the money away just before you retire.
It's time for a "piggy back" Social Security pension that does not have to be matched by the employer but the worker making at least 2 times minimum wage must have 5% and optionally up to 15% of income placed in it.
The-Mick. . .I actually like your thoughts on being able to create some type of private pseduo pension but the danger is greedy politicians will raid that just like they did SS.
The premise of the poll is misleading. Social Security has $2.5 trillion in T-Bills sitting in a trust fund, is financed through 2037 and if nothing were to change it would still be able to pay out higher benefits than it does today, indefinitely. Moreover, under just slightly different economic assumptions, Social Security is projected to have resources sufficient to cover full benefits through the end of this century. More:
The premise of the poll is misleading. Social Security has $2.5 trillion in T-Bills sitting in a trust fund, is financed through 2037 and if nothing were to change it would still be able to pay out higher benefits than it does today, indefinitely. Moreover, under just slightly different economic assumptions, Social Security is projected to have resources sufficient to cover full benefits through the end of this century.
I personally would like to have the government refund all of the money taxpayers have paid into social security right now, in a lump sum payment. Then just cancel the program altogether. No more payments out and no more payments taken out of our paychecks. Then we can take the money we're owed an invest it ourselves. Or for those who desperately need cash this minute to save their homes, they could use it for that. Or for those who don't plan for the future, a great spending spree, which would help boost the economy.
windsinger, the govt can't pay it back. They don't have the money. Social Security is little more than a promise to ripoff future Americans just as you are being ripped off now to pay for current recipients. We boomers will bankrupt the nation as we shift into feed-off-the-taxpayers mode. Get off your knees and do something. Regards....
So what about all the 75 year olds that depend of Social Security to supplement their retirement income. Just cut them off? I worked for over 60 years and paid into social security all 60 of them. What happens to us in that category? Right now we're independent. What you propose would put us on welfare. That's your solution?
If you had a lump sum, it would be gone in a few years. This applies to anyone who took out a home equity loan when their home value was temporarily inflated. That is, such people are not so smart, certainly not smart enough to manage a lump sum!
It takes some economic smarts, moxie, and discipline not to spend it prematurely.
The average retiree takes an expensive trip the first year to celebrate their retirement, and then realizes they can never, ever do that again.
The nation is chock full of people who THINK they own a home, when what they own is a mortgage.
There should be a needs test. SS was originally created to assist people that really needed it... why not go back to that concept. But there needs to be a transistion and that's the sticky part.
So the people who really "need it" will be the ones who chose to blow all their own
money so they could live high on the hog throughout their lifetime. So when they are old and flat broke they are now the needy.
Let me get out my little violin and play "My Heart Bleeds For You".
Just credit my tax account with the amount of social security tax you have already deducted from my earnings and we will call it even. I shouldnt have to pay income tax for the next 20 years.