It comes as no surprise to me that Social Security and Medicare are projected to run out sooner than originally thought. At some point during my education, probably in high school, I remember a teacher telling us that Social Security probably wouldn’t be available by the time people my age were eligible, so I don’t think I ever really believed that I would be getting any sort of Social Security benefits upon retirement. Blame the Baby Boomers. Or rather, blame their parents.
On some level, it’s frustrating. I pay in all this money with the promise that I will benefit from it later. But at the same time, I pay in this money so my grandparents and in a few years, my parents benefit. Social Security helps me by helping them, because it means that I’m that much less likely to have to help support my parents upon retirement.
I’ve heard a number of people joke that Social Security is just a big Ponzi scheme, which makes me laugh, but I see the argument. The money being paid in with the promise of returns later is instead being used directly to pay out to those who have been in the program longer.
Clearly, the bigger issue here is Medicare, and I’m not sure what the solution is. It’s sad that all of these problems will end up falling on the elderly, people who should be respected and cared for and thanked for all they have done for the younger generations. I’m young enough that I can make changes in my retirement plans to hopefully still have enough set aside when I do finally retire. Many people don’t have that luxury.
Megan is a 30-something government employee in the Washington, DC area. She got interested in Personal Finance when she got out of college and realized that her paycheck wasn’t going to go as far as she had hoped. Since starting this blog, she has managed to buy a house and make a solid start on her retirement goals, and hopes to help others do the same. Here is her story:
In 2007, I was a gainfully employed 20-something with no debt but not a lot of knowledge about personal finance. It was a co-worker’s comment about Roth IRAs that sent me to the internet, searching for information. It was then that I realized that I really didn’t know a whole lot about personal finance and that my current financial situation was due a lot to inherent frugal tendencies, generous family members, a fear of debt, and good luck. While that was working for me, clearly I needed a better plan.
While I had no debt, I was also pretty much living paycheck to paycheck and not worrying about going over budget (I say this as if I had a real budget) because I had an emergency fund set aside to cover any overages.
Except that’s not what an emergency fund is for.
So I did a lot of research, read a lot of blogs, and decided that I needed a plan. I needed to budget. I needed to know what I was spending my money on. I needed to prepare for the future.
I decided to create a blog not only to make myself accountable to others but also to share the knowledge that I gained along the way. I’ve learned so much from my fellow bloggers, and I hope that my readers can find something useful in what I have to share as well.
While I think it is fair to assume we won’t get what we paid in to SS, we likely will get SOME benefits. Just reduced. Maybe very much reduced.
I think health insurance as a whole might have to be overhauled to fix medicare. I don’t know, it is a little scary to think about it.
I go on the assumption that there will be no social security left for me when I retire so I need to plan now. So if there is that will just be bonus.
The scary part really is the medicare situation. Let’s hope that this administration really can change the health care system.
I would love to see an annual breakdown of money flowing into SS and money being paid out. Seems like it would be a telling graphic, are we already upside down, at want point was it a healthy system, etc?