General Discussion
In reply to the discussion: Well this is just great..... Social Security and Medicare will run out of money in just over a decade [View all]dpibel
(3,123 posts)Can you reconcile those two concepts?
If SS runs out of money, the benefits, I guess would be cut. To zero.
And yet, that's not what they're saying, is it?
What this really means is that, as of the currently projected date (and this scare story does come around at least once a year, y'know) the SS Trust Fund will be drawn down to zero, and benefits will then be paid out of current receipts.
Lower benefits, but still benefits.
Couple of additional fun facts:
That great big trust fund? Know where that came from? You're right! From us selfish, hoarding boomers, for whom the FICA withholding was right about doubled just as we entered the workforce, so that we would not bankrupt Social Security. Fun Fact: It worked! We paid for our parents and for ourselves.
Additional fun fact: As others on this thread have noted, the fix to this is not to kill SS. It is to adjust the earnings cap so that it is equivalent to the earnings cap when we all started paying for ourselves. Check it out: The percentage of earnings subject to SS withholding was much higher back then than it is now. A simple adjustment fixes it. No low-earnings person would have to pay an additional penny. The rate would not change. It would just be applied to a higher earnings ceiling.l