Thursday, March 24, 2011

Social Security...and Ultrarunning

From Jill at Brilliant at Breakfast on 16 March:

I realize that it seems churlish to talk about money when there are people in Japan cooking and living outdoors in the snow because their town has been turned to rubble and there are four nuclear reactors within 50 miles of what used to be their home that are FUBAR, and their government is at best clueless and at worst lying through its collective teeth to them.

But if you DO have retirement savings invested with companies like Vanguard and Fidelity and the other companies where many of us have some 401(k) money stashed, you may not want to look at your balances right now...because the Dow-Jones Industrial Average is down 430 points this week and the S&P 500 is now in negative territory for the year.

Kind of makes you wish there was some kind of retirement vehicle you could rely on, doesn't it? Something where you wouldn't even feel the money taken out of your check, but when you retire you'd be guaranteed a certain amount every month so that you could do things like keep a roof over your head and a few boxes of Kraft mac 'n' cheez in the house? There's something like that here in the US, but if the Republicans have their way, it might not be around in its current form for much longer.

Jill then links to an NPR article, quoting the following:

Social Security has long been considered the third rail in American politics — those who touch it risk getting a huge shock. And yet on Capitol Hill, there's a growing drumbeat from Republicans to revise the rules of the nation's premier retirement program as part of a larger push to rein in deficit spending. For them, it's an article of faith that Social Security's days are numbered. They want Democrats — especially President Obama — to join their cause, and share whatever political pain may come with it.

Republicans also believe the very best time to fix Social Security is now, during a time of divided government when both Democrats and Republicans can share ownership of any changes. Last week on the Senate floor, freshman Republican Rand Paul of Kentucky demanded an overhaul of Social Security and acknowledged the danger.

The irony of it all is that Social security is not, in fact, in trouble. As a matter of fact, it is happily solvent through at least 2039.  And with minor tweaks, pretty much forever after that. For a more in-depth look at solvency and the non-crisis, see Blue Girl's post here, "What Social Security Crisis?":

The fact of the matter is, in case you are one of the people in this country to whom facts matter, Social Security is a self funding entity, independent of the general fund. It funds itself entirely through payroll taxes, and so long as payroll taxes are collected, retirees will get their checks. The only way that changes is if Congress acts to stop collecting payroll taxes or to outright abolish the program.

When I think of my mother’s last few years of life as a widow, living within her means on a small union pension and Social Security, I wonder how her finances (and those of millions of other seniors) would have turned out had President Bush somehow managed to privatize Social Security….just in time for the big Wall street implosion.

As a Federal employee under the old Civil Service Retirement System, I don't pay into Social Security and will not draw any benefits.  But permit me the luxury of stretching the truth here to figuratively include me in the pool and say that we Ultrarunners will be much better off in our old age if Social Security is treated as a sacred contract that continues to function exactly as designed nearly 80 years ago--an insurance policy with guaranteed benefits.

We can all rest easier and run easier in our old age.


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