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Benson's
Economic & Market Trends
In my youth, my father
worked hard every day and looked forward to receiving his Social Security benefits when his time was due. When he finally began
collecting, combined with a modest pension from General Motors where he worked for over 40 years, he was
able to comfortably support himself
and his family. By the
time I reached mid-life crisis, my father
passed on at the age of 80, just a few short years before GM went bust and his pension and additional health care would have gone up
in smoke. Needless to say, my father
was one of the lucky ones because both his social security and pension checks cleared up to the end.
Now that I’m old enough to apply for retirement benefits, my expectations of actually collecting until the end are fading fast.
The bargain with the government of working hard and paying in so you will be
paid in the future doesn’t
correlate with the current economic data I’ve seen. The chart below shows how much money is actually coming in versus how much money is going out, a wake-up call for anyone my age.
It also shows that the needy and disabled along with those
who have given up on work get paid
first, so social security
has effectively been gutted
already.
The system is
failing because Social
Security Disability and the other
programs for those young enough to work who have chosen not to, provides money to tens of
millions of people looking for a government handout. Like all government programs
for the needy, social security
disability started out as
a small government
program originally designed
to help workers who were seriously injured on the job or had some other legitimate
reason to collect a government check and then a
Medicare card two years later. Today the program has absolutely
exploded and 10.6 million workers
are hiding out on it.
This means, approximately
one out of five social security checks
are going to a disabled worker. So, if you’re expecting to collect social security anytime soon, you’ll need to take a look at the numbers below prior to meeting with your estate
planner:
Please notice that
the hundreds of billions spent
on government programs to house or educate the poor (because this article is not about being "poor") is not even added in. The focus of this article is on those who could
be working, should be working,
and the impact on the cost of paying
them not to work. Whatever happened to earning a benefit? Today, all you need to do is be depressed and tired of looking for work to get full benefits.
Up until
the turn of the century,
social security took in
far more each year in tax payments than it paid
out. Indeed, so much more was taken in that Americans could actually afford big foreign wars!
When you add the honestly-retired together with and the self-declared needy, the Federal Government is shelling out more than two dollars for every dollar collected (the other half has to be borrowed). There just isn’t enough money to take care of both those who
claim to be needy, and those who worked,
paid tax, and stuck with the bargain.
The inevitable
is about to happen. In a
few short years, the rules
for collecting Social Security will
be changed from one of entitlement because you paid
in and earned benefits,
to one of pure need. If you
have other resources available, you may have to exhaust them first and then prove poverty before collecting. Going forward, if you work, you
are going to be required to pay Social Security
tax knowing full well that if you save and invest for your retirement, your Social Security will be cut or eliminated.
The moral of the story is that America
has lost its fiscal moral
foundation. Today, it pays to be needy and it certainly doesn’t pay to be hard working and thrifty! Knowing that those who are depressed and disabled get to receive Social Security before those who suck it
up and go to work every day makes me more than a little depressed. Whoever said life was fair?
Richard Benson
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