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-- Programs and Services -- Contact Information Social Security needs support, not dismantling
By Robert C. Green
Our current President and many in Congress want to divert Social Security money into Individual Accounts just before that money will be needed to pay current retirees and the baby boomers. This would be a big mistake and each of us needs to get involved and save Social Security for ourselves and for future generations.
Before Social Security, more than one-half of all retired workers and their families lived in poverty. Social Security changed all that by establishing a large insurance-type program that provides a large amount of financial protection for a very small administrative cost. Retirees, the disabled and survivors feel and are much more financially secure today.
Social Security is financially strong, has paid every check since it was established in 1935, and has 1.5 trillion dollars in the Trust Funds. With the money that workers and their employers pay into the system there will be enough to pay all current retirees plus the baby boomers who will retire soon. It does appear that future generations are going to live much longer lives, and it may be necessary, at some point, to increase the amount workers and their employers pay into the system so that there will be enough money to pay the many more Social Security checks each person will receive because of their longer lives.
When politicians talk about moving to an Ownership Society, privatizing Social Security, or moving some of workers' Social Security contributions into Individual Accounts they are talking about either partly or totally doing away with Social Security and shifting more of the financial risk of retirement back to each individual, more like it was during the Great Depression. Politicians can say they are trying to save Social Security when they divert money out of the system but that just is not true.
Moving away from Social Security to individual savings and investment accounts puts the risk on the individual to do the best they can with their account. You lose the big Social Security insurance pool of money that enables the system to pay for those who live to 80, 90 or over 100, pay the parent and young children when a worker dies early in life and pays for the worker and family when disability strikes. Economist John Muller found that almost all workers are likely to receive less money in retirement if they switch from Social Security to Individuals Accounts.
The administrative cost of Individual Accounts is higher than Social Security so Wall Street firms may gain money, but there will be less money for retirees. There also will be the cost of transitioning to the new system and some of these estimates are very high. More money will be placed into the Individual Accounts of high-income workers and less in the accounts of women, middle-income workers and low-income workers, so the change to Individual Accounts favors the rich.
We need leaders who really support Social Security. All members of the Massachusetts Congressional delegation do support Social Security and we should thank them and ask them to fight hard.
Robert C. Green, a member of the Massachusetts Association of Older Americans, Inc. (MAOA) Board of Directors, is former New England Social Security Regional Commissioner. His article is used by permission from the MAOA and first appeared in their newspaper, The Older American.