Oldest Baby Boomer Signs Up For Social Security

[REMINDER: Friday, 19 October, is the designated blogosphere birthday bash for Olive Riley's 108th birthday, so get your greetings ready to post tomorrow. The nursing home where Olive lives in Australia held a party for her on Tuesday and there are a lot of photos and a video of Olive singing Bye, Bye Blackbird at her blog, Life of Riley where you will see too that the celebration is already global.]

Last Monday, 15 October, the oldest baby boomer in the nation, signed up for early Social Security benefits which she will begin receiving in January. Born a tick-tock after midnight on 1 January 1946, Kathleen Casey-Kirschling clicked her way through the online registration while television cameras recorded it all at the National Press Club.

House Minority Whip, Roy Blunt [R-Mo.], used the event to sound a partisan alarm, stating in a press release:

"Today marks the first drip in what promises to be a deluge of new Social Security spending - obligations the current program, on its present course, will not be able to meet. And as bleak as the issue looks right now, it's a problem that will grow more acute by the day as Democrats continue to finance their reckless spending agenda by raiding the Social Security trust fund."

The usual media suspects went into a tizzy, as in this story by Dana Milbank:

“That made [Ms. Casey-Kirschling] the first member of the 80 million-strong baby-boom generation, which, starting next year, will begin to bankrupt the nation by crashing the Medicare and Social Security systems.”

Washington Post, 16 October 2007

Oy, the hand-wringing. And, to put it kindly, the misinformation. Mr. Milbank's first error is that baby boomers are not eligible for Medicare for another three years. Also, it is disingenuous to lump the problems of Social Security with Medicare. Unlike Social Security, Medicare is in real trouble. But that can be solved by legislating universal healthcare and fixing the broken healthcare system – a subject for another day.

Fortunately, we have Lita Epstein of BloggingStocks to give us the straight story (and yes, she's going to throw some numbers at you – live with it; this is important to think about]:

“…it's true a fix is needed for Social Security, but if you look closely at the numbers used even in the USA Today you'll see that the fix is not that drastic. As long as we take it seriously and do something.

"In the story USA Today states the fix would need to be a 16% increase in the existing payroll tax or a 13% cut in benefits. First let's look at that 16% in actual tax rates.

“The current tax rate for Social Security is 15.3%, which is 7.65% paid by the employee and 7.65% paid by the employer. Were the Congress to decide to fix the system solely by using tax increases then the increase would be 2.448% or 1.224% for the employer and the employee. That added would move the total tax collected to 17.748% (or 8.874% from one's paycheck)."

Not so bad as the hysterics insist. In my working life, the Social Security deduction went from something like two percent to 7.65 percent. It was necessary and another hike may be too.

Ms. Epstein also discusses the possibility of small cuts in benefits to future retirees, but does not mention that this would not be needed if that salary cap on Social Security deductions, currently at $97,500 and rising to $102,00 for 2008, were eliminated. It is preposterous that people who earn less than the ceiling are taxed on their entire annual salary and those who earn more are not.

According to some studies, these two measures – raising deductions by about one percent to the employee and to the employer and eliminating the salary cap – would return Social Security to solvency by the time it begins to be depleted in 2034. Of course, it would be necessary to write new legislation to forbid the president and Congress from using the new taxes for anything except Social Security; they've already stolen about $2 trillion from the trust fund.

Another issue the Social Security doomsayers don’t take into account is surveys reporting that about 75 percent of baby boomers say they will continue to work past traditional retirement age. If they do (which I don’t believe), they will continue to pay into Social Security and that will go a long way toward filling Social Security coffers too.

There is, however, an immediate problem with Social Security, brought about by Bush administration failings, that could snarl the agency and make recipients live's miserable. Some points from an AARP Bulletin story on Social Security:

• "'This is a train wreck unfolding right in front of us,' says Sylvester Schieber, chairman of the Social Security Advisory Board..."
• “Today, an average of 51 percent of all calls to local offices get a busy signal, according to the SSA's own study…”
• “Among the agency's new responsibilities is determining the eligibility of applicants for Extra Help under Medicare Part D, the prescription drug benefit. Since SSA started taking applications in July 2005, 6.7 million people have applied.
• “In the Intelligence Reform and Terrorism Prevention Act of 2004, Congress assigned the SSA a whole raft of new homeland security regulations to enforce after 9/11, tightening or changing the rules for issuing or replacing Social Security cards.
• “Immigration-related legislation that Congress is considering would require employers to verify the employment eligibility of all new hires. That could significantly increase workloads at SSA, which already verifies huge numbers of Social Security numbers for employers—84 million in 2006.

And then, the Bush administration coup de grace just as millions of baby boomers will need to contact Social Security:

• “As the workload has been increasing, the number of SSA employees has been shrinking. The agency has lost 4,000 workers in the last two years alone, and staffing is at its lowest level in 33 years.”

That oldest baby boomer, Kathleen Casey-Kirschling, was nothing more than a prop for a Republican congressman’s partisan attacks when she signed up for early Social Security online on Monday. But if you are eligible and planning to sign up soon, you would be well advised to follow her lead, make your application early and do it over the internet.

This just in: The Social Security Administration announced on Wednesday that monthly benefits will rise by 2.3 percent for 2008, the smallest increase since 2001.

[At The Elder Storytelling Place today, comedian Georgie Bright Kunkel has a few choice words about elder sex and care centers in Senior Standup.]

Comments

[stella]

Throughout my full-time working career, every time I started to near the the social security cap on deductions, it was raised. Very frustrating.

The political posturing will never end, of course, but I wonder how Kathleen Casey-Kirsching liked being referred to as a drip. (Chuckle)

[Darlene]

Here we go again; the right wing will start the same old scare tactics to try to push their favorite solution -- privatization. (Hello Halliburton!)

Raising the retirement age is another fix that would help solve the baby boomer problem. When S.S. first started the life span was much shorter. Our increased longevity has added to the problem. Now that we are living many more years we should consider putting the eligibility age at 67. That would be a less painful solution. (Of course the disabled would have to be exempt.)

[Crabby Old Lady]

Eligibility for full Social Security benefits is being gradually raised to 67. I, for example, born in 1941, was not eligible for full benefits until December 2006, eight months after my 65th birthday. Raising the age for full benefits another couple of years over time is worth considering.

However, eligibility for early retirement benefits remains at 62 for everyone. Early benefits are substantially reduced and remain so for life. Many people who have good pension plans or savings often take early Social Security for additional income. That first baby boomer, who will be 62 on 1 January, was signing up for early benefits.

The age for early benefits, I believe, should be raised to 64 or 65 now that the incremential age increase for full benefits is nearing its completion.

Disabled already have access to Social Security at whatever age it is needed through SSI.

[Nancy]

I have always said that Social Security could be "Fixed" by discontinuing the cut off. Let everyone pay on their entire yearly salary.

Most people in America never make $97,500 a year in their whole life.

Why should the person who works for $40,000 pay SS all year and the lucky guy who makes $97,500 by June gets to stop paying? Makes no sense to me.......

[gillian]

Oh, these horrible baby boomers, they had to work their entire adulthoods and pay taxes and bring up the next generation and all that stuff, I can't believe we (the government/people/whatever) have to pay out to them what they've earned and certainly deserve! Even if we pay them less than that, it's still horrible for us!

I shouldn't really talk, I'm Canadian. It makes me sad, though. I see all this as bad treatment towards my parents and aunts and uncles, many of whom are American.

I can't believe anyone is complaining about the cost of social security payouts and their effect on the budget when that war of yours is costing, oh, God, I don't know. That money certainly could've been better spent at home.

[Joe Wasylyk]

Baby Boomers should probably think of possible creative solutions to the over extended Social Security programs. This will affect all Nations in the World for the duration of the Boomer life cycle. I believe we need a NEW movement where Boomers think about creative retirement options and then get possible extra income opportunities for increasing the size of their retirement eggs. Then, it wouldn't matter how much the S/S check was you still would have the chance to increase your retirement income by continuing to participate actively in the economy. We must keep running to the FINISH line.

Joe W. (Seniorpreneur)

[William Hallowell]

Interesting post. Social Security is of dire importance. You should definitely check out Facing Up to the Nation’s Finances, a nonpartisan project that addresses the long-term challenges of the federal budget. Read our blog (http://facingup.org/blog), check out valuable resources and information and contribute. Feel free to contact me for more info.

[teresa]

I think the fairest thing to do would be to tax EVERYONE on 75% of their earnings each year, whether those earnings come through capital gains or through a paycheck. Then the bigwigs who have only "unearned" income will be paying on 75% and the little guy will get a break on 25% of his earnings (as will everyone else). I earn more than the cap right now, but for most of my life I've paid SS on 100% of my earnings. It's not fair that the little guys pay for everything and the big guys get built in tax relief.