Now, Boxer’s 37-year-olds from 2005 are 43, and the Trust Fund is on a path to go broke when they hit the official retirement age of 67. At that point, Social Security would only be able to cover 78% of total benefits.
Under such a scenario, low-income and very old retirees would surely be protected, leaving less than 78% for the middle class. But let’s take that 22% benefit cut as a base case.
If Social Security was financially solid for 38 years, as Boxer insisted, then average earners ($43,000 in 2010) early in their careers would be able to overcome this benefit cut by setting aside about 2.2% of annual wages in a personal account each year, assuming Treasury returns and a lifetime annuity. That’s about $950 a year in savings.
Of course, Congress hasn’t kept its eye on the future and hasn’t taken steps to boost individual saving. As a result, average earners who are approaching the halfway mark of their careers would have to set aside roughly 5% of annual wages, or $2,150, to make up for what Social Security won’t be able to pay.
See I know this is laughable. I just received my social security statement that shows my employer(s) and I have kicked in $96,000 into the social security system. The present value of those funds is about $140,000.
For them to send me a statement and not have the money to back it up sounds an awful lot like the statements Bernard Madoff sent to his customers............ and he's in prison.
So what senator will be doing time when I can't get the money the government's been investing for me all these working years.