Social security mess

Dear Editor:Our social security system is a mess. It has gone through innumerable changes since the act was passed in 1935, including a Medicare supplement in 1965. It is hopeless to try to go back and track the effect on an individual who was insured back in the early days. I have a copy of the 2009 social security statement of my son, who is nearly 57 and has a record of taxable employment that begins in 1968. The document says, "Social Security is the largest single source of income for most elderly Americans today, but Social Security was never intended to be your only source of income when you retire." The emphasis is mine. There is also a statement that says that the government will begin paying out more than it receives in 2016, and the social security trust fund will be exhausted by 2037 (meaning payments will be reduced to agree with current receipts). This implies that such a fund actually exists. If it did, and if the receipts had been invested in government securities, we wouldn't have a problem. Instead, our government has been using all of the tax receipts, including those designated for social security and Medicare payments, as a source of operating funds. The numerous changes down the line have resulted in a program that makes no sense at all. For instance, to qualify for benefits, you need at least 40 credits during your working career. You can earn up to four credits per year and, in 2009, you must earn at least $1,090 for each credit. These numbers are subject to change. This means that, currently, you need only work the equivalent of 10 years and need make as little as $43,600 over your career to qualify. That's like working for one day a week at slightly more than today's minimum wage. And that's for only 10 years, while a normal person's working life could be 47 years or more if he starts at 18 and retires at 65 or later. That changes to 66 if you were born after 1960 and is headed for 67. I don't know how they figure your retirement pay, and it wouldn't be much under the above conditions, but you would still qualify for extra money for prescription drugs and for other conditions. The current salary deduction is 6.2% from your pay and 6.2% from your employer for social security and 1.45% from each for Medicare. In my son's case, $38,832 was deducted from his wages and his estimated retirement benefit would be $964 per month at age 66. That means he would recoup his deductions in three years. That's incredible. I read of someone else who recouped his deductions in 2.8 years, so that seems to be the pattern. With a life expectancy of at least 80, my son could get an extra $10,600 at least. I don't see any justification for anyone getting more than he paid (unless it had been invested). And remember, he only paid half that amount. You can argue that if the employer didn't have to pay half of my son's social security, he might pay him more. Maybe and maybe not. Our retirement system should be a defined contribution, not a defined benefit system. Currently, it is taxable if the retiree has enough other income to fall with the 50% of Americans who actually pay taxes - not likely. Maybe we should just start over and let people prepare for their own retirement. There's a novel idea - take responsibility for your own future. -- Don Niemand, Downey

********** Published: February 10, 2011 - Volume 9 - Issue 43