Wednesday, August 21, 2013
Although the Social Security program recently turned 78, there is still a need to preserve and expand the program. Here are five reasons why:
- Social Security is the only safety net for millions of Americans. With half of Americans saving less than $10,000 for retirement, Social Security may be the difference between paying bills and poverty.
- Social Security is currently the only government-sponsored inflation-adjusted lifetime retirement payment. And it’s benefits will be cut by 2033 unless its fiscal situation is somehow bolstered. Sen. Tom Harkin has proposed to do this by raising cost-of-living payments.
- Social Security is a bargain. The average stock mutual fund has administrative expenses of 0.77% and most variable annuities are double that. Social Security expenses are only 0.5%, and Social Security contributions don’t come with sales charges, mutual fund revenue sharing, or 12(b)1 fees.
- Social Security survivorship benefits and disability coverage are bargains when compared with private policies.
- Social Security needs to grow because it is the only guaranteed program not subject to market forces, middlemen fees, or company bankruptcies.
See John Wasik, Five Reasons Why Social Security Retirement Program Needs to Live Long and Prosper, Forbes, Aug. 14, 2013.