Baby Boomers & Social Security

There were 76,000,000 “baby boomers’ born during the period from 1946 to 1964.

If they start to retire this year, there will be approximately 10,000 new people PER DAY added to social security. Maybe they will postpone retirement a few years because the Great Recession has eroded their retirement funds.

It will be interesting to follow the baby boomers and their retirement decisions. Some will take social security early at age 62 because the funds are available now (really?) and some will postpone retirement by working longer. Their decisions will dramatically affect the social security system.

Facts:

The Treasury Department reveals that the Social Security program outlays exceed payroll tax revenues by $76 billion in 2010. The program is in the red!

The Social Security Administration Trustees over estimated the revenue by $50,000,000.

Social Security Program income was $807 billion in 2009

Social Security Program income was $741 billion in 2010
A trend??

The Social Security Administration Trustees reported the following:

"Social Security expenditures are expected to exceed tax receipts this year for the first time since 1983.
The projected deficit of $41 billion this year (excluding interest income) is attributable to the recession.
This deficit is expected to shrink substantially for 2011 and to return to small surpluses for years 2012-2014 due to the improving economy.
After 2014 deficits are expected to grow rapidly as the baby boom generation's retirement causes the number of beneficiaries to grow substantially more rapidly than the number of covered workers.
The annual deficits will be made up by redeeming trust fund assets in amounts less than interest earnings through 2024, and then by redeeming trust fund assets until reserves are exhausted in 2037."

During the years Social Security had a surplus, the Social Security Administration “loaned” the Treasury the money. The Treasury now will have to pay back the Social Security program because the program must make up the deficit between revenues and costs.

Treasury borrowed money to pay Social Security benefits in 15 out of the last 25 months. This will add to our deficit every year!

We are still at a 9.4% unemployment rate and much higher by including the under employed and sole proprietors + small business with no employees (making less during the Great Recession). How can the Social Security deficit “shrink substantially” in 2011 with less workers paying into the system????

Baby Boomers – take your money now and become “vested” or wait and receive a higher monthly payment?

If you and your spouse started to receive social security benefits at age 62 instead of 66, you would be receiving 75% of the total benefit and your spouse 35% of the total monthly benefit if you retire at age 66.

And, that is assuming government officials can even be close to being correct on their revenue/cost projections for the program. Remember, government experts are most always wrong!!

Congress – time to step to the plate and be leaders - do something.