Boomer Financial Survival: The pension lie that is Social Security

Where the money is....

When Willie Sutton bank robber was asked why he robbed banks he said "Because that is where the money is". How things have changed.

The banker's Bank the Federal Reserve is now robbing savers with near zero interest rates. Why? Because that is where the money is. It is a hidden tax. No law was passed. Still you are having the your money stolen through near zero interest rates to restore bank's balance sheets. If you had $300,000 in an IRA (or 401k) earning 5% in 2007 ($18,000 a year with nearly no risk) you are lucky if you earn half that today. That is a $9,000 or more of hidden taxes.

I hope to expose these types of actions and others by the FED and government. Boomers need to be vigilant - because their savings is where the money is. I will also delve into other areas of finances of interest to Boomers.

Sunday, February 27, 2011

The pension lie that is Social Security

In truth, almost all pensions are a lie.

The pension that comes to mind for most of us in the US is Social Security. A tax is deducted from our paychecks to fund the pension. By law, when the program takes in more than it pays out (as it did from 1982 thru 2009), it has to loan the excess to the federal government. The federal government is obligated to pay this amount back with interest when the program faces a shortfall. In 2010, it faced a shortfall. It is expected to face a shortfall in 2011. In addition to all its other debt, the federal Government now owes the Social Security Trust Fund (the account to which surpluses are loaned) some $2.5 trillion dollars. Surpluses are projected to return for the next few years but then from 2015 on, the program is expected to face deficits. Social Security payouts will then depend upon government injections but by 2037, the Social Security Trust Fund will be zeroed out. I think we all know where a government already deeply in debt will come up with the money. They will either borrow it, print it, or tax it. We can all debate a fix, but the program is a Ponzi scheme and it is built on lies. In true Ponzi fashion, there are 3 people working to support 1 beneficiary. Forty years ago that ratio was three times as wide and in looking forward, the ration will tighten even further.

http://www.financialsense.com/Contributors/Barry-ferguson/pension-lies-lead-to-riots

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Background

I am a leading edge boomer, first of a huge wave of boomers. I believe I have done an adequate job in preparing for retirement (no debt, some savings, IRA accounts, home paid off, no auto payments). My largest recurring monthly cost is health insurance.

The one area I come up short is long term care insurance. As I suspect a large per cent of boomers do. ...

I enjoy playing the stock market and most week days will be online watching the market. I tend to crunch numbers when analyzing any situation (as you might expect from a college math major). If you are like me you are concerned about things going on with the economy, the FED, the government deficits, potential inflation and the many things that could derail your plans.