Getting to the Bottom of Social Security - PowerPoint PPT Presentation


PPT – Getting to the Bottom of Social Security PowerPoint presentation | free to view - id: 28a9f-NTQ2M


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation

Getting to the Bottom of Social Security


What is Social Security? ... working lives are cut short by death or disability, private accounts will be too ... .org/issue_advocacy/index.cfm. Action Network ... – PowerPoint PPT presentation

Number of Views:34
Avg rating:3.0/5.0
Slides: 16
Provided by: maa2


Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: Getting to the Bottom of Social Security

Getting to the Bottom ofSocial Security
  • Values Economics Influence

Lisa M. Maatz American Association of University
What is Social Security?
  • SS is a national commitment through which we care
    for one another across the generations
  • Its not an investment program its a social
    insurance program that protects against
    catastrophic loss of income
  • SS is a shared risk program were all in it

How Social Security Works
  • When we pay FICA taxes, workers receive SS
    credits at a maximum of 4 credits per year
  • Employers and employees pay taxes equally into
    the system
  • Only wages up to 90,000 are subject to SS taxes
  • The amount of the SS benefit is based on a
    worker's top 35 years of earnings averaged over
    an entire working career
  • Early retirement -- at age 62 -- means a lower
    guaranteed lifetime benefit over a longer period
    of time
  • The age of retirement with full benefits is being
    incrementally raised from age 65 to age 67 for
    those born before 1960
  • Social Security is a pay-as-you-go system
  • Guaranteed, lifetime, inflation-protected benefit
  • Administrative costs for the Social Security
    program are about 1 of benefits

Social Security is not Simply a Retirement Program
  • SS provides lifelong family protections
  • Just half of all Social Security beneficiaries
    receive benefits solely as retired workers
  • Remaining SS beneficiaries are children, widows,
    spouses, and people with disabilities
  • Social Security supports more children than TANF
  • For a young family, SS provides the equivalent of
    a 400,000 life insurance policy and a 350,000
    disability insurance policy
  • 75 of private sector workers have no long-term
    disability insurance except for their SS

Social Security IS your Moms Retirement
  • SS prevents massive poverty among the elderly
  • Without SS, over half of all women 65 and older
    would be poor
  • SS lifted nearly 7 million older women and 4.7
    million older men out of poverty in 2000
  • The income that SS provides to the elderly
    benefits multiple generations, easing the
    financial burden on adult children who are saving
    for their own families
  • homes, education, retirement

Why are We Talking about theFuture of Social
  • For the past several decades, the Social Security
    system has intentionally operated with a surplus
  • More workers paying into the system than
    beneficiaries drawing on the system
  • That surplus is placed into the SS Trust Fund
  • When the baby boomers retire, the surpluses end
    and those funds are used for their benefits
  • More beneficiaries drawing on the system, lower
    ratio of workers paying into it

A Fictional Crisis
  • Given the surplus in the SS Trust Fund, this
    increase in beneficiaries should not present a
  • The federal government borrowed from the SS Trust
    Fund to cover discretionary spending priorities
    and mask the true extent of the deficit
  • The SS Trust Fund was issued IOUs from the
    government in the form of interest-bearing
    Treasury bonds
  • One of the most conservative and stable
    investments available

A Long-term Question Not a Crisis
  • The SS Trust Fund must be repaid to cover the
    expected benefit levels required in the coming
  • Starting in 2017 the bonds must be repaid
  • SS still paying 100 of benefits
  • Bonds will be fully repaid by
  • SS Trustees 2041 CBO 2052
  • Roughly 75-80 benefits thereafter

Privatization IS the Crisis
  • Privatization weakens SS Remember pay-as-you-go
  • 2 trillion over 10 years
  • 5 trillion over 20 years
  • Takes away social insurance nature of the
    program, puts the risk on the individual
  • The Presidential Commission's plan cuts SS
  • Changes SS benefit formula
  • Even for those who work and contribute until
    retirement, CBO projects that private accounts
    are unlikely to make up for SS cuts

Privatization IS the Crisis
  • Enrolling in a private account may be voluntary
    (up to 4), but the cuts affects ALL future
  • Even those who do NOT chose the private option
    for themselves
  • SS benefits would be cut even further for those
    who contribute to a private account
  • When working lives are cut short by death or
    disability, private accounts will be too small to
    make up for the difference

Privatization Threatens UniqueSocial Insurance
  • Lifetime benefits that cannot be outlived
  • Guaranteed, predictable benefits that dont
    fluctuate with the stock market
  • Inflation protected benefits annual COLAs are
    particularly important to those with long
  • Progressive benefit formula that replaces a
    higher of pre-retirement income to low earners
  • Automatic and supplementary benefits for spouses,
    ex-spouses, and surviving spouses
  • These protections cannot be replicated by private

Social Security Matters
  • To Children
  • Roughly 1 in 12 of all SS beneficiaries are
  • 5.4 million kids under age 18 lived in families
    where someone received SS
  • Lifts millions of children out of poverty
  • To Women
  • Women's wages continue to lag significantly
    behind men's (76)
  • Women live longer, poorer lives than men
  • Women of color are most likely to be poor in old
  • Women are the primary caregivers for children and
    older people

Social Security Matters
  • To Racial and Ethnic Minorities
  • 1 in 16 African American children receive SS
  • Latinos have higher average life expectancy
  • Generally
  • SS is the main source of retirement income
  • Higher disability rates and lower lifetime wages
  • Less likely to have income from private
    pensions/other assets
  • To People with Disabilities
  • A 20 year old today has a 1 in 6 chance of
    becoming disabled before reaching retirement
  • SS provides lifetime income support to about
    730,000 disabled adult children (based on a
    parents work record)
  • More than 1/3 of SS benefits are made to 17
    million people who are disabled workers and
    their dependents

AAUWs Position
  • Anti-privatization Strengthen, dont dismantle
  • SS is the most successful anti-poverty program in
    the nations history
  • Privatization proposals weaken Social
    Securitymaking the problem worse, not better
  • Modest adjustments could ensure the Trust fund
    could pay of 100 of guaranteed benefits for the
    next 75 years

Join AAUW in the Fight!
  • For more information, visit
  • http//
  • Action Network
  • Note Special thanks to the National Womens Law
    Center for some statistical analysis used in this