AP: Social Security not deal it once was for workers [View all]

[Omaha Steve]

http://apnews.excite.com/article/20120805/DA0FCAI00.html

By STEPHEN OHLEMACHER

WASHINGTON (AP) - People retiring today are part of the first generation of workers who have paid more in Social Security taxes during their careers than they will receive in benefits after they retire. It's a historic shift that will only get worse for future retirees, according to an analysis by The Associated Press.

Previous generations got a much better bargain, mainly because payroll taxes were very low when Social Security was enacted in the 1930s and remained so for decades.


In this July 26, 2012, photo, Neta Homier looks over bills in her home in Toledo, Ohio. Homier says she relies on Social Security to pay her bills and while she is confident the program will continue to help her she fears it will not be able to rely on it. "Social Security is what’s carrying me," Homier said. "It pays all my bills." People retiring today are part of the first generation of workers who have paid more in Social Security taxes during their careers than they will receive in benefits after they retire. It’s a historic shift that will only get worse for future retirees, according to an analysis by The Associated Press. Previous generations got a much better bargain, mainly because payroll taxes were very low when Social Security was enacted in the 1930s and remained so for decades. (AP Photo/Carlos Osorio)


"For the early generations, it was an incredibly good deal," said Andrew Biggs, a former deputy Social Security commissioner who is now a scholar at the American Enterprise Institute. "The government gave you free money and getting free money is popular."

If you retired in 1960, you could expect to get back seven times more in benefits than you paid in Social Security taxes, and more if you were a low-income worker, as long you made it to age 78 for men and 81 for women.

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