May 11, 2011
Despite what pundits around
the country are saying, Social
Security is strong and can pay beneficiaries 100 percent of their benefits
for the next 25 years – that’s the message attendees received at a special AARP
New Mexico presentation on Social Security – “Is Paying into the Social
Security system throwing your money away or helping to secure your future?”
The discussion, which outlined the basics of Social Security and how it works,
was part of the New Mexico Coalition for Financial Education’s fifth annual
financial literacy summit titled “Wealth: How to Get it, How to Keep it and How
to Grow it”. The free event was held April 15 at the Hotel Albuquerque in Albuquerque.
“People keep hearing that Social Security is going broke – well, hardly,” said
Bill Morrison, an AARP New Mexico volunteer. “Currently the trust fund has $2.4
trillion in it.”
“The trust fund comes from you and me paying into the system in anticipation of
a comfortable retirement. Only benefits and administration can be paid out of
the trust fund,” Morrison said.
There are several myths surrounding Social Security and one of those is that
the Social Security trust fund only exists on paper since other parts of the
government can borrow from the trust fund.
Morrison said that this is somewhat true but the trust fund is backed by the
full faith and credit of the U.S. Government and therefore, the funds will not
simply disappear – they are guaranteed.
Social Security was designed so that Congress could occasionally tweak the
system as needed to adjust it for future generations. While the system is
strong for the next 25 years and even after that would still be able to pay
about 75 percent of promised benefits, some moderate changes need to be made to
ensure the system stays strong for future generations.
Currently Social Security is available to all who pay into it. It not only
provides a retirement income for those who are most vulnerable among our
population, it also provides vital income to the middle class as well. But it
is not just a system for the retired it also provides benefits for the disabled
and those whose loved one has died.
“At this point and time, 63 percent of the people receiving benefits are
retirees, 15 percent are disabled, 8 percent are children receiving survivors
benefits, 5 percent are spouses and 9 percent are widows, widowers and
parents,” Morrison said.
As lawmakers look at ways to reduce the deficit, AARP is taking a strong stand
that cuts to Social Security are not acceptable.
“AARP maintains that Social Security has not contributed to the nation’s debt
and as such should not be cut to balance the budget,” said Leonel Garza, who
leads AARP New Mexico’s State Legislative Committee. “AARP believes that Social
Security is a guarantee that when you pay in, you get the benefit you’ve
earned. It is also important to remember that young adults have been paying into
the system for years and also deserve the benefits they’ve earned. With the
economy still causing havoc on pensions and people’s personal finances, people
are depending on their Social Security benefits even more.”
Source: AARP New Mexico