{"id":549921,"date":"2023-02-09T20:53:00","date_gmt":"2023-02-09T17:53:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/brett-arendss-roi-social-security-and-medicare-are-everyones-problem\/"},"modified":"2023-02-09T20:53:00","modified_gmt":"2023-02-09T17:53:00","slug":"brett-arendss-roi-social-security-and-medicare-are-everyones-problem","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/brett-arendss-roi-social-security-and-medicare-are-everyones-problem\/","title":{"rendered":"#Brett Arends&#039;s ROI: Social Security and Medicare are everyone\u2019s problem"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_89 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6af1f5eba9731\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6af1f5eba9731\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/brett-arendss-roi-social-security-and-medicare-are-everyones-problem\/#%E2%80%9CBrett_Arendss_ROI_Social_Security_and_Medicare_are_everyones_problem%E2%80%9D\" >&#8220;Brett Arends&#039;s ROI: Social Security and Medicare are everyone\u2019s problem&#8221;<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/brett-arendss-roi-social-security-and-medicare-are-everyones-problem\/#Listen_up_under_40s_This_Social_Security_battle_is_yours_too\" >Listen up, under 40s: This Social Security battle is yours, too<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/brett-arendss-roi-social-security-and-medicare-are-everyones-problem\/#Brett_Arends\" >Brett Arends<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9CBrett_Arendss_ROI_Social_Security_and_Medicare_are_everyones_problem%E2%80%9D\"><\/span>&#8220;Brett Arends&#039;s ROI: Social Security and Medicare are everyone\u2019s problem&#8221;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\"><span class=\"ez-toc-section\" id=\"Listen_up_under_40s_This_Social_Security_battle_is_yours_too\"><\/span>\n  Listen up, under 40s: This Social Security battle is yours, too<br \/>\n<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\">\n<div class=\"article__side\">\n<div class=\"container--sticky not-active\">\n<div id=\"cx-next\" data-nosnippet>\n              <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap crawler\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0001660263\" role=\"document\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div data-layout=\"\n                inline\" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetArticleReader\n              \n              inline\n  article__inset\n          article__inset--type-InsetArticleReader\n              article__inset--inline\n  \"><\/p>\n<div class=\"media-object-article-reader\">\n<div class=\"audioplayer\" data-sbid=\"WP-MKTW-0001660263\" role=\"region\" aria-label=\"Listen to Article\" tabindex=\"-1\" id=\"articlereader\" data-show-title=\"false\" data-theme=\"wsj-article-reader\" data-show-header=\"false\" data-show-subscribe=\"false\" data-ads-enabled=\"true\" data-save-publication=\"false\">\n        <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       The <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.ssa.gov\/OACT\/TR\/2022\/II_A_highlights.html#\" class=\"icon none\">multitrillion-dollar battle over Social Security and Medicare<\/a> spilled over into the annual State of the Union circus Tuesday night.<\/p>\n<p> President Biden (accurately) accused some Republicans of wanting to cut the programs or \u201csunset\u201d them (so they would expire after\u00a0five\u00a0years unless they were explicitly renewed). Many Republicans didn\u2019t like his remarks. Some heckled and booed, shouted \u201cliar!\u201d and worse.<\/p>\n<div class=\"paywall\">\n       <strong>Read:<\/strong> 12 things you need to know about <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">Social<\/a> Security\u2019s future, explained by the program\u2019s chief number-cruncher<\/p>\n<p>(But no, Kevin McCarthy didn\u2019t rip up Biden\u2019s speech at the end.)<\/p>\n<p>Biden was correct. As we pointed out here before, some Republicans have said precisely what he claimed. (Kevin McCarthy made unguarded remarks on the subject shortly before last November\u2019s midterms: It\u2019s possible the topic cost the GOP their \u201cRed tsunami.\u201d)<\/p>\n<p><strong>Read: <\/strong>Yes, Republicans want changes to Social Security and Medicare entitlements\u2014because some changes are needed<\/p>\n<p>But it\u2019s not just seniors, or those over 40, who should be getting into this fight. Social Security and Medicare are\u00a0millennials\u2019 and Generation\u00a0Z\u2019s battle too.<\/p>\n<p>The reasons are pretty simple. They are already benefiting from these programs. And they are going to need them\u2014and how\u2014when they retire.<\/p>\n<p>They\u2019re already benefiting because Social Security isn\u2019t just a pension plan. It also operates as disability insurance, paying benefits if you are severely disabled and cannot work again, and as life insurance, paying survivors benefits to a spouse and children if you die young. So even if you\u2019re decades from retirement you\u2019re already benefiting.<\/p>\n<p>\u00a0\u201cFor a young worker with average earnings, a spouse, and two children, that\u2019s equivalent to a life insurance policy with a <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.cbpp.org\/research\/social-security\/top-ten-facts-about-social-security#:~:text=Fact%20%231%3A%20Social%20Security%20is,Security%20benefits%20in%20January%202022\" class=\"icon none\">face value of nearly $800,000 in 2020, according to Social Security\u2019s actuaries<\/a>,\u201d says the Center on Budget and Policy Priorities, a Washington, D.C. think tank. <\/p>\n<div id=\"cx-membership-tile\"><\/div>\n<p>And then there\u2019s retirement.<\/p>\n<p>A third of millennials, age 27 to 42, say they are already behind schedule saving for retirement. (So reports <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.gsam.com\/content\/gsam\/us\/en\/individual\/about-gsam\/news-and-media\/2022\/retirement-survey-press-release-working.html\" class=\"icon none\">Goldman Sachs<\/a>.)\u00a0About half of them are worried about having enough savings when they retire, and more than three-quarters say they have been held back\u00a0from\u00a0saving for retirement by the need to pay off student loans and other debt. \u00a0<\/p>\n<p>Boston College\u2019s Center for Retirement Research projects that a rising share of retirees will struggle to maintain their standards of living after retirement. By the time they reach their 70s, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/crr.bc.edu\/wp-content\/uploads\/2017\/11\/wp_2017-17-1.pdf\" class=\"icon none\">some 40% of millennials will be unable to replace 75% of their preretirement income<\/a>, the center reports. The equivalent figure for the baby boomers was just 30%. The Urban Institute, a Washington, D.C. think-tank, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.urban.org\/research\/publication\/how-might-millennials-fare-retirement\" class=\"icon none\">reached similar findings<\/a>. <\/p>\n<p>They would have been in trouble even if it weren\u2019t for the lockdowns. As it h<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ens, a third of them say they have already stopped saving\u00a0<em>at least twice<\/em>\u00a0in their careers so far due to financial hardship or an emergency.<\/p>\n<p>Now do the math.<\/p>\n<p>Someone\u00a0who is\u00a030 years old today <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.ssa.gov\/oact\/STATS\/table4c6.html\" class=\"icon none\">can expect to live<\/a>, on average, into their 80s. Using Social Security\u2019s own life tables, about half of those\u00a0aged\u00a030 will make it to 83 and a quarter will make it past 90. What will they need? Without Social Security, someone who wants to collect a retirement income of, say, $50,000\u00a0a\u00a0year and keep up with inflation would need to save around $1 million by the time they\u00a0retire.<\/p>\n<p>But the average Social Security benefit in retirement, around $20,000, cuts that by two-fifths.<\/p>\n<p>Arguably <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.ssa.gov\/news\/press\/factsheets\/basicfact-alt.pdf\" class=\"icon none\">the most important numbers<\/a> published by the Social Security\u00a0Administration itself are these: Social Security currently provides about 30% of the entire income of America\u2019s senior citizens. Two-fifths of seniors rely on Social Security for half their income. And for some, about one senior in\u00a0seven, Social Security accounts for 90% of their income.<\/p>\n<p>Unless you work for state or local government, today you are very unlikely to have a traditional pension plan: The kind that pays you a guaranteed income, typically tied to your salary and years of service, for life. For most of us, Social Security is going to be the only one left.<\/p>\n<p>The value of these benefits is hard to overstate. Social Security pays a retirement income that is guaranteed for life and\u2014crucially\u2014tied to inflation. You can\u2019t even buy that in the financial services market. Life insurers will sell you an annuity, providing an income for life. But few of them have any adjustment to reflect the cost of inflation. And those that do typically cap the annual hike at around 3%. And those policies are very, very expensive.<\/p>\n<p>Social Security and Medicare are in the political crosshairs because they\u00a0face a funding crisis.\u00a0Social Security will have to start cutting benefits across the board in about 10 years unless Congress (and voters) step up and find a solution. The funding gap over the next 75 years is about $20 trillion in today\u2019s money.<\/p>\n<p>But the crises do not justify the claims that Social Security is \u201cgoing bust\u201d or that it \u201cwon\u2019t be there for your generation.\u201d That is total nonsense. <\/p>\n<p>Even without any fixes at all the program will still be able to pay around four-fifths of benefits. And various reasonably simple fixes\u2014like ending the cap on taxable earnings, or financially encouraging more people to work a little longer\u2014can make the situation a lot better. A tax equal to 1.7% of annual gross domestic product would fill the gap completely.<\/p>\n<p>Meanwhile, the simplest fix of all is being blocked by what amounts to a conspiracy of the two parties. The Social Security trust fund is running short of money because it is entirely invested in low-returning U.S. Treasury bonds, an investment policy so bad that any normal pension fund manager who tried it would be sued into oblivion for breach of fiduciary responsibilities. If the trust fund were invested like any other pension plan\u2014with most of its money in the stock market\u2014there would be a surplus, even today.<\/p>\n<p>What the Social Security debate could really do with right now is some fresh blood and fresh thinking\u2014which is where the younger generation could step in.<\/p><\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>    <span>By<\/span><\/p>\n<div class=\"author mobile-scrim hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"Brett Arends\",\"subhead\":\"The Wall Street Journal\",\"list\":[{\"type\":\"link\",\"icon\":\"bio\",\"url\":\"https:\/\/www.marketwatch.com\/topics\/journalists\/brett-arends\",\"text\":\"Biography\"},{\"type\":\"link\",\"icon\":\"twitter\",\"url\":\"https:\/\/twitter.com\/BrettArends\",\"text\":\"@BrettArends\"},{\"type\":\"link\",\"icon\":\"email\",\"url\":\"http:\/\/www.marketwatch.com\/news\/mailto:barends@marketwatch.com\",\"text\":\"barends@marketwatch.com\"}]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"Brett_Arends\"><\/span>Brett Arends<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p><ufc-follow-author-widget product=\"marketwatch\" author-id=\"209_MW\" author-name=\"Brett Arends\" signin-url=\"https:\/\/accounts.marketwatch.com\/login?target=https%3A%2F%2Fwww.marketwatch.com%2Fstory%2Fsocial-security-and-medicare-are-everyones-problem-11675965234%3Frss%3D1%26siteid%3Drss\" panda-api=\"https:\/\/follow-api.marketwatch.com\"><\/ufc-follow-author-widget><\/div>\n<\/div>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=%7B20C06575-04D4-B545-7195-567C51A01AE9%7D&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;Brett Arends&#039;s ROI: Social Security and Medicare are everyone\u2019s problem&#8221; Listen up, under 40s: This Social Security battle is yours, too The multitrillion-dollar battle over Social Security and Medicare spilled over into the annual State of the Union circus Tuesday night. President Biden (accurately) accused some Republicans of wanting to cut the programs or \u201csunset\u201d&#8230;<\/p>\n","protected":false},"author":1,"featured_media":549922,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.mktw.net\/im-721396\/horizontal","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-549921","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/549921","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=549921"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/549921\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/549922"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=549921"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=549921"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=549921"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}