I can't borrow from my 401k to buy a home, but the Government can borrow from my social secuirty???

By
Industry Observer with Greater Boston Association of REALTORS MA 9505496/Broker

Relying on Social Security When You Retire?...Think Twice

I seldom discuss politics, but the AP recently printed an article discussing the natural turn of events as the Social Security Program begins to pay out more than it takes in, now that Baby Boomers are becoming eligible for benefits, Gen X will be shortly behind (and based on the attitudes of Gen Y and the Millenials, they feel entitled to social security benefits already).  With the increasingly aging population, coupled with historical unemployment rates and a continual outflow of jobs to be sourced outside of the US (anyone tried calling Dell recently?), we've already seen freezes to cost of living increases in benefits, and now, according to the Congressional Budget Office, the startling news that the social security fund will be out of money by the year 2037.  Let's see...that puts me at age 74, so by current measures, that means that my 50 years of contribution to social security will net me...6-8 years of full benefits and then only 78% thereafter.

How did this happen?  During my college days, an overhaul to the social security system was supposedly made to ensure that those who contributed would have something to retire on when the time came.  In fact, it seems that these changes did work, such that the social security fund had a surplus of up to $2.5 trillion at one point.  This surplus was exactly what was needed to pay out benefits to an aging population.

But then our global economy soured, and sneaky politicians got their hands on this excess, promising to pay it all back.  But at what interest rate?  What ever happened to the fiduciary responsibility that the social security administration has to me as guardian of my benefits?  Why can the government can borrow from the social secuirty system, but yet I can't buy a home with my 401k?  And why, oh why did our legislators vote to reduce the employee contribution towards social security from 6.2% to 4.2%?  Doesn't seem to make sense.  It just hastens the date that the social security system will be broke.

Read the article Social Security Fund Will Be Drained By 2037 for yourself.  If you are like me, you'll be scratching your head after reading it.

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Comments (1)

Phill Grove
REI Maverick - Austin, TX

Great point!

Jan 27, 2011 10:07 AM