[JoeBialek]

According to the Social Security Act, "the purpose of Social Security is to provide insured persons with payments by way of a retirement benefit, survivors benefit, sickness benefit, and to substitute for compensation under the Workmen's Compensation Ordinance, a system of insurance against injury or death caused by accident arising out of and in the course of employment." In order to finance social security, a Social Security Fund was established, financed by contributions made by the workers and their employers. All benefits, administrative expenses, and capital expenditures are paid out from the Fund.

But according to government figures, "while Social Security takes in more than it spends right now, the situation reverses when the baby boom generation (those born between 1946 and 1964) begins to retire in 2010. Unless the system is overhauled, Social Security by 2013 will be spending more than it collects in taxes and will be broke by 2032."

I will be 69 years old in 2032. I will have paid a very large percentage of my income into a government plan and will have nothing to show for it. Accordingly, Social Security payroll deductions should end for anyone born in 1965 or later and be shifted to a 401(K) plan so they will reap the rewards of their investment when they retire. Those born in 1964 and before should continue some Social Security payroll deduction along with some government subsidy to cover the difference.

With all this talk of tax refunds fueled by a government surplus coupled with the enormous corporate tax breaks given out by our government, I am sure we could find enough money to subsidize a transition plan to save our retirement money.

[Todd D.]

But according to government figures, "while Social Security takes in more than it spends right now, the situation reverses when the baby boom generation (those born between 1946 and 1964) begins to retire in 2010. Unless the system is overhauled, Social Security by 2013 will be spending more than it collects in taxes and will be broke by 2032."

Myth. A majority of Social Security is still Pay as you Go. It didn't move towards a fully funded system until 1982. It's impossible for it to "bankrupt", because it's coming directly from the taxes paid that year. Benefits may decrease, but it cannot go bankrupt.

[FutureNow]

But according to government figures, "while Social Security takes in more than it spends right now, the situation reverses when the baby boom generation (those born between 1946 and 1964) begins to retire in 2010. Unless the system is overhauled, Social Security by 2013 will be spending more than it collects in taxes and will be broke by 2032."

The part in bold is the only part that is false. What you pay in Social security is put directly into the general fund with the rest of your taxes. There is no special account for your money. The only thing that will be broke are the tax payers.

[Todd D.]

Well, if they want to keep benefits at the level that they are at, then yeah, taxes are going to have to increase, that's a given. All I was saying was that it is actually impossible for Social Security to be "broke", because with the exception of the general trust, which is a small amount relative to benefits paid out, there is no pool of money to go broke.

[FutureNow]

Its a shame we arnt given a chance to opt out of social security. Eventhough I've been paying into it for 7 years, I would gladly still opt out even if it ment lossing the money I put into it up till now.

[Todd D.]

The funny thing is, that within two or three years, you will at least get a return on your investment if you invest in other securities. Equities have averaged an actuarily fair 9.4% real rate of return since 1929, while other Bonds have yielded an actuarily fair 2.3% real rate of return in the same time period. Social Security yields less than Bonds do, so I echo your statement, it is a shame.