Surplus

This comes up from time-to-time in 401(k) meetings: the Social Security thing:

... [Social Security's] surplus is almost twice the $1.4 trillion collected in personal and corporate income taxes last year. And it is projected to go on growing until 2021, the year the youngest Baby Boomers turn 67 and qualify for full old-age benefits. ...

From 1961 through 2011, the year covered in the last Social Security report, Social Security taxes exploded from 3.1 percent of Gross Domestic Product to 5.5 percent.

Income taxes went the other way. The personal income tax slipped from 7.8 percent of the economy to 7.3 percent, with most of the decline enjoyed by people in the top 1 percent of incomes. The big drop was in the corporate income tax, which fell from 4 percent of the economy to 1.2 percent. ...

So to recap: Over the past three decades, the middle and lower brackets have shouldered most of the funding of their own retirements. In effect, the Middle Class has prepaid its own Social Security retirement fund. Yet if you listen to various talking heads, they'll inform you that all of those bonds in the Social Security trust fund are "worthless i.o.u.s," (as opposed to all those Treasury bonds in high-flyers' portfolios, which are ... you know ... "full faith and credit" i.o.u.s.)

I bring this up because lots of thirty and forty-somethings tell me that they don't think that "Social Security" will be around when they reach retirement age. Well, if they vote the right set of people into office, they can certainly make that prediction come true.

But they don't have to vote that way. Especially if they want some kind of decent retirement.