As we enter ‘crazy time’ in the electoral calendar (a calendar that now runs from the Friday after the last election to the day of the next one), we will hear ever more about the desperate need to balance the federal budget and pay down the national debt. Few will strongly argue against these budget-balancing ambitions. The arguments are over just how to do that.
Social Security payouts make up some 20% of the federal budget, tied with national defense and one percentage point behind Medicare/Medicaid. Yet Social Security is usually singled out as one of the three federal line items that must be trimmed (Social Security, Medicare/Medicaid, and … um … oops.). The American Association of Retired Persons challenges five of the most commonly-stated myths about the state of Social Security, even in the midst of the economic malaise we continue to struggle with.
Myth Number One? Not surprisingly:. According to AARP, that scary claim is untrue no matter how you divvy up the dollars. “Even in the unlikely event that nothing changes and the program’s entire surplus runs out in 2036, as projected, checks would keep coming. Payroll taxes at current rates would cover 77 percent of all the future benefits promised. That’s true for young and old alike, and includes inflation adjustments.”
Read the other four myths and the facts that refute them at AARP’s site. Then you can make an informed decision about how to vote in 2012, and how to plan for your retirement after that.