Will Social Security Run Out?

The Social Security Administration announced today that there will not be an automatic increase in income benefits in 2010 due to a decease in consumer prices in the last year, affecting over 57 million Americans.

This will mark the first year since the Cost-of-Living Adjustment went into effect in 1975 that there is no increase.

President Obama is proposing that Congress send an additional $250 recovery payment for the Americans affected, like the ones sent earlier this year as a part of the economic recovery package

According to a report released in May 2009 by trustees who monitor Medicare and Social Security, they predict that the trust fund from which Social Security payments are drawn from will be unable to pay full benefits by 2037.

Although many reports have predicted the future of Social Security and Medicare as a severe downturn and loss of money since its inception in the 1930s, administration official say that Congress could counter this by increasing workers’ Social Security payroll taxes and/or by decreasing benefits. (Information courtesy of The Washington Post)

No American would enjoy the benefits of either of these options, but it may be America’s only chance at supporting the basis of our social beneficiary system.

Although Obama is pushing to help those he claims were hardest hit by the recession, one wonders how long Social Security will be able to stick out the fluctuations of the economy.

Joseph Lazzaro, economic blogger, suggests the solution is to raise current Social Security taxes, raise the retirement age to 70, and to develop an accurate consumer price index.

Each option might have unintended consequences on the economy, but offers a valid standpoint for Congress to direct their efforts towards.

Many questions face Americans as they look into their own retirement future:

Will young and middle-aged people pay into this system a majority of their lives and face no return once they grow old? Will Congress and the Obama Administration stabilize the retirement system enough to keep our older generation out of poverty?

The retirement dream of vacationing on the beach, relaxing with yoga, and entertaining the grand-kiddos might wither away as our economy fights to stay above water.

Sinking Politics.

For more information visit www.ssa.gov, and washingtonpost.com.