The Future of Social Security
Is It Fair For 3 Million Government Workers To Get an Extra Boost?
One of the big issues about our future financially is Social Security. So I want to ask you a simple question. Is it going to be there for you when you reach retirement? Well, half of millennials asked that question. These are people ages 26 to 40. One half of them said, no, they are not going to get Social Security. They think the Social Security system is going to collapse and go broke long before they reach retirement. Well, I don't think they're right. I think Social Security will exist in the future.
The big question is how old we have to be to qualify to get benefit and what will the benefit be? We know that the Social Security system is in trouble right now because there are too few people working paying into the system and too many people retired, taking money out of the system and monthly benefits. The Social Security Trust fund is going to be broke in about 10 years unless Congress acts. Congress needs to either raise the taxes or reduce or delay the benefits. What's Congress doing? Well, there's a bill right now that would do neither of the above. It won't raise the taxes. It won't lower the benefits. You know what it does? It raises the benefits for government workers.
Right now, government workers have a haircut to their Social Security benefit. It's called the windfall elimination provision. It affects 2 million federal employees. There's also the government pension offset, which reduces benefits for spouses and widows of those who worked for the government, those who get a government pension as a spouse or widow. That’s another 750,000 people. The bill in Congress would eliminate these features so that government workers and their spouses or widows will get more money from Social Security. I mean, the reason that these features exist is the attitude that you shouldn't double dip if you're saving money into retirement, like paying into Social Security or paying into a pension. If you're paying into one, you shouldn't get benefits from both. And so these haircuts are designed to acknowledge that you're paying into a government pension, you're not paying into Social Security, and therefore, we're going to give you a haircut on your Social Security benefit to acknowledge your government pension benefit.
Now, there's a bill in Congress from a Democrat, of course, saying we want to eliminate these provisions so that government workers are going to get more money from Social Security. Yeah, this will benefit those 2.7 million federal workers. But guess what? It's going to make the Social Security trust fund go broke even faster than it otherwise would.
The government analysis says it will go broke one year faster. It's going to cost Social Security $146 billion over the next 10 years - in a very moment when the Social Security system can least afford it. So while we're dealing with an issue of the trust fund being totally depleted anyway, this makes the situation that much worse. Rather than improving the situation, Congress needs to reduce benefits. It needs to delay benefits and or it needs to raise taxes. Increasing the benefits in a time like this, that doesn't make a whole lot of sense. It's fiscally irresponsible.