How is the social security retirement fund keep up with inflation?
By kingparker
@kingparker (9673)
United States
December 8, 2011 7:08pm CST
So, here is my question regarding to future retirement in related to the inflation year after year. As you know, a healthy economy should have inflation rate around 2% - 3%, I read it from a book, but I absolutely have no idea why. Social Security retirement fund can be claimed when you reached the age of 65, but I just wonder, with the healthy economy rate of 2% inflation every year, how in the world this social security fund can keep those retired alive, by paying bills and insurance all that? It is unimaginable unsustainable by calculation? As you also know, our social security deposits will depleted by the next 50 years, it also mean we are on our own when we get retired.
1 person likes this
3 responses
@andy77e (5156)
• United States
1 Jan 12
Actually Social Security will be out of money next year. Those deposits you speak of, are actually US savings bonds. The problem is US savings bonds come out of the Federal Budget.
With a deficit of $1.6 Trillion dollars, we don't have any money in the Federal Budget. That's why the government is saying we have to fix it now, instead of 50 years from now.
Those deposits don't exist. There is no money in social security.
@nezavisima (7408)
• Bulgaria
9 Dec 11
Oh this is a very serious matter.
I personally already samnyavma whether to retire just so that new laws every year new things.
This is just some nonsense must once and for all solve this problem and complete.
Thank you for discussion.
nice day!
@peavey (16936)
• United States
9 Dec 11
They really don't keep up with inflation, but during "normal" periods, a SS recipient is given a cost of living raise at the first of the year. This usually is 2.5 to 3.5%. The last two years, they've been given nothing because the economic factors used to figure inflation don't include the very things that are costing more, notably, food. Many older people who depend on SS are having a very hard time of it.
The SS fund grows by the same inflation as it pays out, theoretically. When wages go up to meet inflation, more actual dollars are taken from each worker's paycheck for Social Security and such. It's supposed to be balanced and it would have been if they'd have kept their hands off of it. It wouldn't last forever, but it wouldn't be in such bad shape right now.
It doesn't take a genius to look ahead a few years and try to set up a plan to help people create their own retirement funds. George Bush tried to do that by making SS the responsibility of the recipients to be, but they didn't like that, so it didn't pass.
