“The new trajectory suggests that the trust fund’s current depletion date of 2036 may jump ahead several years when Social Security’s trustees release their annual report this spring, making the retirement program more central to the 2012 election,” IBD’s Graham wrote.
That means the trust fund runs dry sooner than its projected 2036 bankruptcy date. When that happens, workers can expect a legally mandated 22% cut in Social Security benefits when they retire.
So, after forking over 12.4% of their earnings — both directly and through their employers — for 35 or 40 years, they can look forward to receiving a less-than-zero-percent return while continuing to spend their working lives paying 100% of the promised benefits to current retirees.
They can replace the Social Security shortfall by saving an additional $2,150 a year, but only if they have time to do it — workers approaching retirement will have to save even more — and just to break-even with the promised Social Security payment.
I would predict the outcome to involve me paying more and getting less. My question: Is it a tax or a savings or insurance plan?