Retirement & Social Security
What You Need to Know
- Social Security is currently in surplus and will take in more than it pays out until at least 2037, more than a quarter century from now.
- Raising the employer and employee payroll tax rates by just 1.1 percent each would erase the entire 75-year projected shortfall.
- Inequality leads to the projected Social Security shortfall: as income growth has become concentrated at the top, more income has fallen above the payroll cap of $106,800. Congress could close the entire 75 year projected funding gap by raising or eliminating the cap on taxable payroll income.
- Not just an I.O.U.: Income to the Social Security trust funds must be invested in guaranteed Treasury securities, which can be redeemed at any time at face value, giving the trust funds the same flexibility as cash.
- Social Security can never add to the yearly deficit; by law it cannot draw a single dollar from general revenues, even if payroll taxes fall short of scheduled benefits.
- Not just for the Elderly: Social Security also protects you if you become disabled—a 20 year-old worker has a 30% chance of dying or becoming disabled before they reach retirement age.
- Social Security provides more benefits to children than any other program (more than TANF or SSI programs).
- Average lifetime benefits, in constant dollars, will be greater for every future generation—even if Congress lets benefits begin to shrink in 2037.
- Only 59% of full-time workers have access to a retirement plan at work.
- Investment management fees for mutual funds in retirement plans can cost an average worker up to $150,00, or 25% of their lifetime returns.
- 75% of all households have less than $45,000 saved for retirement (only 52% have any savings, and half of thoe with savings have less than $45,000.)