America’s Broken Retirement System is a Recipe for Political Chaos

Yves here. I am not terribly keen about this post but it’s important to keep up on the various proposals being made to deal with an escalating retirement crisis. Readers will look past the fact that this post promulgates the “Federal taxes fund spending” canard. And this economy needs more demand, not more savings.

By Lynn Parramore, Senior Research Analyst at the Institute for New Economic Thinking. Originally published at the Institute for New Economic Thinking website

As stocks go up and unemployment comes down, an increasing number of older Americans find themselves dodging bill collectors and spiraling into debt. Many warn of severe economic repercussions if this continues. But there’s more—large swaths of downwardly mobile seniors who thought of themselves as middle class is also a recipe for political chaos. Economist Teresa Ghilarducci, an expert on retirement security and Director of the Schwartz Center for Economic Policy Analysis at The New School, explains what’s happening and what’s at stake if we don’t fix it.

Lynn Parramore: A new report shows that American seniors are filing for bankruptcy at three times the rate that they did in 1991. But headlines say the economy is humming. Why are older people so broke?

Teresa Ghilarducci: The rise of the elder bankruptcy rate is no surprise, even if unemployment is low and stock values are up. Poor elders have terrible job prospects and very few households hold significant amounts of stock, bonds, and other financial assets. The erosion of retirement income security started decades ago.

LP: Can you explain what happened?

TG: In 1983, Congress and the President [Reagan] decided to restore Social Security solvency by cutting benefits and raising revenues equally. The FICA tax [Federal Insurance Contributions Act tax] was raised slightly and benefits were cut by raising the age people can collect full benefits from 65 to 70.

LP: As a Gen-Xer, that has always stuck in the craw because those years of collecting Social Security were taken away before I was old enough to vote!

TG: That’s correct. Though the political principal of equal revenue boosts and benefits cuts sounded fair, it was a nonsense way to make policy. Cutting the solution in half makes as much sense as King Solomon’s solution to cut the baby in half.

In 1983, the system needed much more revenue and not benefit cuts since there was no sign that voluntary actions by employers and workers would make up for the cuts. “Raising retirement ages” is a benefit cut. People can collect Social Security at age 62 and for every year they wait until 70, benefits increase on an average 6.34% per year. Therefore, those who can wait get a large boost and those who have to collect before 70 have a lifetime cut of over 11%.

Also, all the signs that private plans would fail were right. Instead of employers making pensions more available, generous, and widespread, more and more companies shifted financial risks of retirement savings to workers through a cheaper and less generous kind of pension: the 401(k).

Despite the hope that the do-it-yourself retirement accounts—401(k)-type plans and individual retirement accounts (IRAs)—would mean more workers would have some source of income besides Social Security, the retirement plan coverage rates of prime- aged workers has fallen from about 70% to close to 50%.

LP: So half of all workers don’t have a retirement account of any kind?

TG: That’s right. Another sign our retirement system has failed is that the median account balance of all people—including those who have an account from their current job or a past job; no account at all on the eve of retirement (age 55-64); or people who worked a full career under the defined-contribution employer pension revolution with ever-increasing tax breaks—is only $15,000. The low median account balance is because half of older workers have no retirement account balances at all, no 401(k)-type plan or IRA.

Let me repeat: almost half of all workers nearing retirement age will have nothing but Social Security to rely on.

For the lucky half who have some account balance in a 401(k) type plan or IRA, their median balance is $92,000. Spread that amount over a person’s retirement life and it will pay for a cheap dinner and a movie once a month.

LP: What’s going to happen if large numbers of people run out of money in retirement?

TG: If we do nothing to reform the current retirement system, the number of poor or near-poor people over the age of 62 will increase by 25% between 2018 and 2045, from 17.5 million to 21.8 million. That means real hardship and expensive responses by state and local governments through emergency housing, food assistance, and Medicaid costs.

There is another effect if we do nothing that could have serious political ramifications: middle class workers becoming downwardly mobile. Inadequate retirement accounts will cause 8.5 million middle-class older workers—a whopping 40% of all middle class older workers (aged 55-64) and their spouses—to be downwardly mobile, falling into poverty or near poverty in their old age. This is unprecedented since Social Security was formed.

Boomers and G-xers will do worse than their parents and grandparents in retirement.

LP: What do you say to those who argue that the answer if for people to just work longer?

TG: Working into your mid-sixties and beyond is not going to save many people from poverty and downward mobility. The unfriendly labor market for older workers with low incomes and nonprofessional degrees tells a different story.

My research lab’s reportdocuments the growth in older workers’ unstable and low-wage jobs from 2005 to 2015. By 2015, nearly 25% of older workers were in bad jobs—defined as those that require on-call work and low-wage traditional jobs that pay less than $15,000 per year. The share of workers ages 62 and over in bad jobs grew from 14% in 2005 to 24% in 2015.

LP: The American workplace is changing, with union membership in the private sector in the single digits, earnings of workers lagging behind gains in labor productivity and temporary, contract, and on-call work on the rise. Meanwhile, fewer workers get health or pension benefits through their jobs. How are we supposed to save for retirement in these circumstances? What ideas are out there?

TG: Richard Thaler just won a Nobel Prize for his work in behavioral economics, which has been very influential in shaping thinking on pension policy.

He advises that the government engage in “libertarian paternalism.” Instead of mandating pension coverage, Thaler proposes voluntary design changes to the current U.S. “do-it-yourself” system, which is spotty because it is voluntary on the part of employers and employees and requires individuals to direct their own commercial accounts.

But his “design” suggestions are more of the same. He proposes to have employers automatically enroll workers in a retirement plan the employer may (or may not) sponsor. Remember, less than half of employees have a retirement plan offered at work. Workers could opt out and many of the people who need coverage the most opt out for economic reasons, for instance women,and never get an employer contribution.

The second major design change he wants is voluntary “auto-esclation.” The idea here is that employers would automatically contribute all or a portion of their workers’ salary increases in their account. Unfortunately, auto-enroll and auto escalate only works for employees with stable jobs, no breaks in service, continual raises, and high incomes. According to many studies, one from the Urban Institute and a recent one of mine with graduate student Ismael Cid-Martinez, these voluntary features ensure that the tax breaks for retirement plans disproportionately go to the top 20% of workers.

The current voluntary, individual-directed, commercial system design leaves low and middle-income workers behind. Why? Because employers don’t want the expense and hassle of providing a retirement account to workers and may be afraid to offer one if their competitors don’t—a classic collective action problem. Unfortunately, unions are too weak to help employers coordinate and universally provide pensions.

LP: So despite his Nobel Prize, you think that Thaler has got it wrong. How would you help people save?

TG: I propose a retirement plan for all plan — a federal plan that mandates a prefunded layer on top of Social Security. A universal public option for retirement saving. The plan would be portable, accountable, low-fee, pooled and ensure a steady return. A mandated pooled plan is the best way to provide social insurance because no worker can go it alone or insure against employment, financial, investment and longevity risk by themselves.

The idea is to enhance the best features of the decentralized system while making up for its deficits. Hamilton James and I propose Guaranteed Retirement Accounts (GRAs) in our 2018 book Rescuing Retirement. A version of the same proposal was in my 2008 book (When I’m Sixty Four) and in a paper I published for the Economic Policy Institute in 2007. GRAs are universal individual accounts whose investments are pooled and they are funded throughout a worker’s career by employer and employee contributions and a refundable tax credit.

If the GRA plan were implemented today, we could prevent over 8 million elders from falling into poverty. But GRA wouldn’t be enough; we need a stronger Social Security system.

LP: Important that you also mention the need to expand Social Security. Can you explain how it would be possible? What do you say to people who argue that “we can’t afford that” or that Social Security is “running out of money”?

Social Security is fully funded until 2034. The Social Security Board of Trustees estimates that we will only be able to pay three-fourths of current benefits promised after that date if there are no adjustments. That is not insolvency or going broke. It is a potential shortfall, which depends heavily on wage growth and inequality, productivity, fertility, and immigration.

Social Security is designed to be updated periodically, so as time goes on it is always “running out of money” unless it is updated. The FICA tax has been increased 21 times in its 83-year-old history, typically every 2 years. But we have not increased the FICA tax in over 28 years! It’s time for a raise. Right now, the tax rate is 12.4%, split between employer and the employees. If we raise the FICA tax now to about 15%, the system could pay promised benefits for about 75 years. If we raise the earnings cap (now only $128,700) for Old Age and Disability insurance (Medicare tax is on all earnings) then we have revenue to raise the special minimum benefit for the poorest elders and prevent abject elder poverty.

The Social Security administration has identified the impact of several major proposals to expand and strengthen Social Security—most involve revenue raises.

The reality is that we need both an enhanced Social Security system and an advanced funded layer. No country has provided a stable pension system just on a pay-as-you-go system. The Spanish, Greek, and Italian systems tried but they have moved away from a pay-as-you-go system as their aging populations cause the tax rates to rise to unsustainable political levels.

LP: What are the biggest obstacles to addressing the looming crisis and what are your thoughts on how to overcome them?

TG: Relying on personal thrift to ensure against the financial insecurity of old age has not worked. But the biggest obstacles to mandating a retirement account for all and improving Social Security are members of the industry that thrive on voluntary do-it-yourself retirement accounts. The 401(k) and IRA industry will be challenged by the existence of low cost and high return stable GRAs that offer low-cost lifetime annuities. The industry has fought the efforts at the state level to provide public retirement plan options.

I hope that America is not locked into an extreme, voluntary, market-based retirement income security system.

The most important obstacle to change is political. Workers and, by extension, older workers, need to act collectively and militantly to spur policymakers into action. Only large scale collective action with voting and organizing can get our representatives to build a system that ensures that the retired can live financial comfortable and stable lives.

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  1. antidlc

    I would appreciate any info to answer my question:

    The article says two things:

    1) “TG: In 1983, Congress and the President [Reagan] decided to restore Social Security solvency by cutting benefits and raising revenues equally. The FICA tax [Federal Insurance Contributions Act tax] was raised slightly and benefits were cut by raising the age people can collect full benefits from 65 to 70.”

    2) “Social Security is fully funded until 2034. The Social Security Board of Trustees estimates that we will only be able to pay three-fourths of current benefits promised after that date if there are no adjustments. That is not insolvency or going broke. It is a potential shortfall, which depends heavily on wage growth and inequality, productivity, fertility, and immigration.”

    Back in 1983 FICA tax was increased and SS benefits were cut, but SS is facing a shortfall in 2034 according to estimates.

    Question(s): Why the shortfall? They could estimate back in 1983 how many people would be retirement-eligible in 2034. What assumptions were (or are) wrong? Did they assume higher estimates of wage growth back in 1983? Did they assume different birth rates? Why the shortfall?

    1. divadab

      1) Demographics – an aging population; and
      2) Lower wages mean lower contributions per capita than assumed.

      1. Procopius

        Yes, the Greenspan Commission projected larger wage increases than industry actually granted. I’m not sure how significant it is, but there was also a larger than expected shift of executive compensation from cash (taxable) to stock options (non-FICA taxable). Then there was also the increase of executive compensation above the cap on earnings. That, I understand, would in itself solve the shortfall.

    2. Pat

      Remember NAFTA was still in the future, and the Overton window was much farther left. We didn’t live in a society that not only enriches but for all intents and purposes encourages corporations to take jobs out of America. All those good middle class manufacturing jobs that disappeared over the last 30 years not only decimated communities, that loss also took a toll on social security in more ways than one. For instance it would not be surprising if there has been an increase of people seeking disability as they couldn’t find jobs. This could include some who might have continued working until or perhaps even past 65/66/67 if the less grueling but better paid jobs they had still existed. There could also be a likely increase of children receiving benefits from the rising death toll both from our never-ending wars AND from the fact that people are dying sooner. As stingy and grudging as they are, Social Security benefits see cost of living increases, something few workers see anymore, isn’t the estimate that it has been almost thirty years since wages have increased in America?

      And all that is off the top of my head. I do believe that the reasons stated for the FiCA increases were largely real, I also believe that it was smoke and mirrors and a means of offsetting the Reagan tax cuts on the books on the backs of the poor and working class. (Remember that Reagan and Bush 1, quietly backed off some of their cuts and even to the point of reversing some of those, as it didn’t increase tax revenues like predicted.) It probably was not intended to succeed, as even then the end of SS was a favorite conservative rich guy dream. While I might think many of the changes to employment and employment compensation we have seen in the last thirty some odd years would delight asses like Greenspan and his ilk, I’m pretty sure it never occurred to them that they would get even a quarter of the wish list policies passed and especially those that have decimated the middle class and guaranteed that all gdp increases have gone to the people at the top in these decades. If we lived in a sensible reasonable and fair society, it would not have happened. Unfortunately Clinton was very effective at serving the oligarchy.

      1. sharonsj

        I have seen no COLA showing up in my SS check for four years now. For two years there was no COLA. Then for two years there was a small one which was immediately eaten by a raise in the Medicare deduction. In addition, the way the government figures out the COLA is based on complete nonsense, so it will never, ever keep pace with inflation. These are the reasons you see 80-year-old Walmart greeters.

        1. d

          No. some in Congress set up COLA rules to make it work that way. the odd thing those that complain about this tend to vote that do this

      2. Procopius

        All those good middle class manufacturing jobs that disappeared over the last 30 years …

        Minor quibble: we’ve been talking about the loss of good jobs for so long the “30 years” has become habitual. It’s actually now over 40 years. We need to be mindful and use the correct number.

    3. False Solace

      2034 – 1983 is more than 50 years. That’s a pretty good run.

      Back in the days when presidents actually cared about responding to recessions, Bush 2 did a FICA tax holiday. That would have stopped the trust fund from growing a little bit.

      But the overwhelming reason for the “shortfall” is the fact that wages haven’t increased in 40 years. All the growth has gone to the top of the income scale, and all of that income is exempt from SS taxes.

      That said, it’s impossible to “prefund” retirement. The things retirees need are ultimately pulled from the economy. There’s no way to stockpile doctors and nurses, houses and food in an effort to “save up”. If those things aren’t available in the economy at large, no amount of monetary instruments will poof them into existence. Therefore, the best way to fund retirement is to ensure a healthy and vibrant economy well into the future. Since the government can create money at will and give it to retirees as needed, the rest is moving numbers around. If we as a society decide we want to preserve our elders from poverty, and we have the economy to support them, that’s all that needs to be done.

      1. emorej a hong kong

        Exact and very well stated:

        There’s no way to stockpile doctors and nurses, houses and food in an effort to “save up”. If those things aren’t available in the economy at large, no amount of monetary instruments will poof them into existence. Therefore, the best way to fund retirement is to ensure a healthy and vibrant economy well into the future. Since the government can create money at will and give it to retirees as needed, the rest is moving numbers around.

        … with a corollary:

        the best way to have enough doctors and nurses for all retirees is to ensure that steady growth in the quantity of doctors and nurses, houses, and food, is catalyzed and sustained by the structure of the economy

    4. Greg Taylor

      Why the trust fund shortfall? The long decline in interest rates since 1983 wasn’t anticipated and the fund total is lower than could have been predicted at the time.

      The “trust fund” isn’t invested in anything – the amount in the “fund” is just an accounting record that tracks the amounts contributed. Periodically, these amounts are increased according to a formula that is based on interest rates from treasury securities. No securities are actually purchased and no “fund managers” are required to keep this record.

      The formula used to add “earnings” to the “trust fund” has been changed in the past and could be changed in the future. It’s a formula that provides far less earnings to the fund than a typical pension fund would receive.

      One easy way to cure the “shortfall” would be to change the formula used to add “earnings” to the fund. Assume a higher rate of interest, say by giving heavier weight to the longer-term treasury bonds or using a floor rate of no less than say 5%.

      As mentioned by a commenter below, this just maintains the fiction of a “trust fund” that was necessary to garner public approval for the social security system long ago. Perhaps it’s still be necessary to maintain that fiction.

      1. d

        Actually SSN buys treasuries, the same ones banks etc do. but you are right most problem is the crash of incomes and jobs in the US

        1. Greg Taylor

          SS Trust Funds haven’t held the public treasuries sold to banks in decades. They hold “special issue” securities not available to the public. There is no market for these special issues, by law, only the trust funds can hold them. Trust fund “purchases” and “redemptions” have no effect on the public treasuries market. Their interest rates are determined by a formula that depends in large part on the market rates of public treasuries. The formula was changed in 1956 and 1960.

    5. Odysseus

      Social Security benefits are progressive. Lower income contributors get more benefits per contribution dollar. (90% at the lowest bracket and 15% at the highest)

      The fact that wages have been stagnant for decades would naturally push a lot more people into the lower wage benefits brackets.

    6. timbers

      The income limit upon whick SS taxes are levied has not been raised, thus effectively freezes SS revenues to a large extent. This is a relatively recent occurrence I think.

    7. Dan

      There are a lot of projections that go into setting contribution rates for a retirement plan. Given that these rates were set in the 80’s, and projected to be good through 2034 indicates they did a hell of a job!

      When new information comes in, you adjust to it. I’m sure there are other projected costs that people/businesses face that were not exactly what was projected in 1983. But, when it is retirement, everyone claims it’s a failure.

      The actuarial work done in 1983 was very, very good. IMHO.

  2. charlie sheldon

    Seems to me the simplest solution here is two fold: 1) firstly, make it impossible for Congress to raid the trust fund to cover other expenses (this is probably never going to happen sad to say) and 2) apply the CURRENT social security tax rate on income to ALL income, salaries at whatever level, and unearned income as well. If we did that we could provide for retirement for all and medical coverage for all (retired and not yet retired) tomorrow.

      1. False Solace

        Into Treasury instruments, just like they are now.

        The whole thing is just a figment of accounting, but I’d rather do that than have the Feds engage in a pointless exercise of “investing” in private assets and companies. State and local retirement plans have no other option; the federal government does and we’re all better off if we minimize the opportunity for graft.

    1. d

      how do you think they ‘raid’ it? SSN is invested in treasuries (just like a lot of other investors do that have have a high likely hood of getting their investment back, unlike a lot of other investors). treasuries are loans to the US government. and that is the highest quality bonds you can get (and the market agrees its why it pays about the lowest interest any one does). and while i can see expanding SSN to all income, how do apply that business? since thats about the only ones not taxed for SSN (not objecting to the idea). the other choices are removing the cap all together and or raising the rate (today there are folks who earn more in a month than the cap is.

      1. jsn

        Treasuries haven’t been a loan to the government since Nixon took us off gold in 1971.

        The interest is now a form without market substance, the Fed sets it where it wants interest rates for its own political objectives.

        The “market” purchases treasuries now because the vast surplus of them, created by the act of Congress that requires the Treasury to sell bonds equal to its spending, creates surplus reserves at banks who can either sit on the surplus without income from it or wire it to the Fed and get a few percent.

  3. kernel


    1. Don’t “raise the cap”, GET RID OF IT!
    – avoid raising FICA Rate because it’s regressive & FIRE Sector Rentiers don’t pay in anyway.
    2. Cap payouts. (with COLA on Cap)
    3. Add new Funding source from Capital Gains, other non-wage income, or Financial Transactions.

    Is this another case of Democrats adopting obsolete GOP in order to appear “reasonable”?

    1. orange cats

      Thank you !!!!

      The cap is, and has always been, outrageously regressive and unfair, yet somehow invulnerable.
      Yes to all three of your points. I’m having them embroidered on a throw pillow.

      1. kernel

        oooh, pillows suitable for throwing at people with complex plans to make Social Security worse!? Filled with… rocks? Please make a bunch for me, too!

      1. JTMcPhee

        Yes, and is the capped amount enough to live on? And how come people don’t ask why is that, exactly? Something to do with “fork you peons” legislation? In which, of course, the Dems are fully “in collusion” with their bipartisan buddies in the other part of the Uniparty…

        Of course there’s class warfare, and it’s my class, the rich class, that’s waging it. And we’re winning.” Warren Buffett.

  4. Pension Guy

    The starting point for any discussion about social security is to ask what went wrong with the 1983 compromise. The best answer is that policy makers chose the wrong index for the cap on FICA taxes. The idea was that 90% of wages would be subject to FICA taxes, but we chose the average wage index at precisely the time earnings for high income workers took off and never looked back. Accordingly, we hit the 90% target for a year or two, with the resulting shortfall being entirely responsible for the funding gap now predicted for 2034.
    Yves’ comment about needing demand could be solved, at least partially, with increased infrastructure spending, which could be accomplished if our public pension funds used a discount rate low enough to become modestly competitive with the bond market.

    1. Jamie

      The starting point for any discussion about social security is to ask what went wrong with the 1983 compromise.

      No, the starting point for any discussion about social security is, why a trust fund? FICA is regressive and should be eliminated, not tweaked with constantly changing caps and percentages. The whole trust fund scheme bolsters the illusion that people are paying their own way; that social security is not the government fulfilling its responsibility to care for the welfare of aging, no-longer working, citizens, who have not amassed sufficient wealth over the course of their lifetimes to adequately care for themselves. Because once one admits that a government has a valid interest in caring for the welfare of its citizens, the whole neoliberal mythos collapses.

      1. d

        there isnt really a trust fund, what there is a huge amount of treasuries, and there isnt really any other investment that the money could go in, that doesnt explicitly say there is a non 0 likelihood that all of the money could be gone. all of it. and since one of the things they knew in 83 was that there was a huge number of retirees that were going to hit (baby boomers any one?) that would impact SSN hard, starting in the last few years (hence the so called trust fund was created so that more would be contributed than would normally be done with pay as you go. and while they over estimated wage growth, they did try to address what they could

        1. Penny

          Lots of fairly technical terms pitch up on ordinary conversations as if what is meant by the words is what is meant by the term. Fund or ‘trust’ fund is a case in point. Some governments pay for old age pensions on an ‘arising’ basis; they pay out of current government income (composed of revenues from taxes and revenue from borrowing). These pay as you go schemes take some of the cash paid in (taxes) to government by those working today and pay it out to old age pensioners. A pay as you go scheme.
          The US created a scheme that separated the tax on wages as income and the taking of a part of the wage to pay for pensions and other ‘socialized’ insurance products, such as disability insurance, etc. The part dedicated to pensions was put in one fund; the other insurance money was put into other funds.

          This means of the lets say $150 you pay in ‘FICA’ tax, about $100 goes into the social security old age pension account and with the $100, the pension controller buys risk-free treasury bonds. The key is they are risk free. They pay interest.

          Enough of this: you can see why some might prefer a ‘fund’ based retirement system to a pay as you go retirement system and they are different.

        2. jsn

          “there isnt really a trust fund, what there is a huge amount of treasuries, and there isnt really any other investment that the money could go in”

          This is the reductio ad absurdum of thinking taxes have to fund the US government, which runs Social Security. To “fund” the program the US taxed an amount equal to the Trust Fund needlessly which took this money out of the very likely to be spent incomes of working people. 40 years of this and you get stubbornly persistent demand deficits, because people don’t have that money, which demand deficit leads organically to lack of investment opportunities.

          The whole causality is backwards, if demand had been sustained and productivity growth equitably shared there would be lots of paying investment opportunities now and no retirement crisis. But this is precisely what was intended by the NeoLiberal revolution of the 80s, to concentrate all the economic gains in the hands of the people most obsessed with money, and its worked just as planned.

          1. Oregoncharles

            That assumes that there weren’t resource restraints, which there were and, increasingly, are. Which doesn’t mean the “Trust Fund” was a good idea; it’s really a scam, which ultimately transfers SS funding from the dedicated payroll tax, which is politically untouchable, to the general fund, since that’s where payments on the bonds have to come from. It also creates a fake overhang of debt – funds the government “owes” itself. And it conceals the reality that Social Security is a transfer program.

            In general, I think you’re right that it was sabotage; Greenspan approved the idea, after all. However, we could easily give the politicians at the time credit for more foresight than they had; never underestimate incompetence. And at the time, MMT wasn’t even as accepted as it is now – when were the first texts on the idea?

            1. jsn

              MMT used to be called Chartalism and in the West got off to a spectacular start, as in spectacle, in a bad way, with John Law’s attempt to convert Mississippi Company stock into a paper currency controlled by the French Regent (with Law as his agent of course) after the Sun King died.

              China had a thousand our so year run with fiat before that which worked on the identical principles MMT has redrawn in order to create a body of research that can be appealed to to resist the financiers ideology of “sound money”. So first texts go back a ways. Mosler’s mandatory readings are a good outline of MMT.

              With regards to the resource constraints, I don’t really agree. There was a real resource constraint triggered by OPEC responding to Nixon taking the US off gold, depriving the oil exporting counties of annual gold shipments, but the de-regulation of the natural gas market corrected that pretty quickly. So by the time Reagan got around to “fixing” Social Security, natural gas deregulation had already fixed the real resource constraint.

              There is a much longer story to tell about what Chicago School economists and right wing governments used the inflationary episode for, but its too much to get into here.

      2. JBird

        why a trust fund?

        It was a question asked of FDR. He consciously set it up Social Security to have its own separate trust fund with a dedicated payroll tax so that later politicians would find it harder to simply eliminate the program. People are told that that part of their taxes goes towards their own old age and not towards something like tax cuts for the Job Creators™️ or yet another front in the forever War on (Some) Terror. He thought it was very important to block the strong Social Darwinist and the Troglodyte factions of both parties from eliminating it later on.

        1. Jamie

          OK, I get that. Yet here we are with diminishing benefits and potential future elimination is still a very real possibility which many people are working hard to achieve. Perhaps we would have lost it long ago without the fund structure, but that structure is not really adequate, and it is misleading a lot of people into confusion on a very important issue.

          1. JBird

            Perhaps we would have lost it long ago without the fund structure, but that structure is not really adequate, and it is misleading a lot of people into confusion on a very important issue.

            FDR was prescient. The true problems are the social and economic Troglodytes who think even the most basic of social programs are actual evil and taxes to pay for them are theft. The opponents of the program spend a lot of money trying to destroy it and have since its creation, which includes creating that very confusion. That is over eight decades of active efforts to undermining the whole New Deal along with five decades for the Great Society.

            So it is not adequate, but at the time of its creation, there was almost no help aside from a few very inadequate state programs, churches, and a few charities to help the aged indigent who had no family. Social Security was only able to be created because of the Great Depression and was a Godsend for the relatively few people who would live long enough to receive it. Also, the economy was at least partially on the Gold Standard with something like MMT hardly even dreamed of. A permanent program like Social Security would be very, very vulnerable to cutting once the crisis causing its creation had ended.

            Since then, the program has expanded to cover more people, wages have been frozen or decreasing, with the same then on funding, and the COLAs (cost of living adjustments) have not kept up with inflation especially in housing. The formulae used for calculating the cost of living increases are strangely inaccurate as they tend to shortfall the true increasing costs of living.

            If, like they used to do, people’s wages actually increased in tandem with, or surpassing, inflation, and if the COLAs actually were accurate, then both the funding and the effectiveness of the program would be much better. If the ideas in MMT were accepted, that too would help. Heck, Congress, for decades, used to adjust FICA often to maintain and even increase the funding, but Taxes Are The Evil.

            The Troggs are winning. For now.

            1. Wukchumni

              Let’s compare American epochs:


              Largest exporter
              Largest creditor
              Largest manufacturer
              Largest economy
              Largest oil producer

              Howzabout now?

              1. JBird

                Hey, we still got the most powerful military on Earth, losing wars everywhere all to to the forever War on (Some) Terror!

                Yeah, that wonderful magical Neoliberal Free Market Capitalist goodness enriching the Talented Tenth that comprise the Meritocratic Class, who are the faithful courtiers to the 0.01% that comprise the Ruling, and extremely wealthy, Class. Clearly, the remaining 90% of Americans are lazy, worthless, losers. The Deplorables.

                The more I study this dying, oozing, festering, economic and social wasteland, the more it seems that the justifications are merely the modern versions of the Devine Right of Kings.

    2. Jim A.

      Well the root of social security’s problem is simple demographics. There is an ever shrinking number of current workers per retiree. The trust fund is merely a way to account for this. We don’t have warehouses full of cumadin, caprice classics, and nursing home beds. In the future a higher percentage of GDP will be spend on these things. The trust fund does nothing to change the fact that a higher percentage of the goods produced by current employees will be consumed by their elders and not them. It just takes a portion (up to about 20%) of thatand uses income taxes* instead of payroll taxes to fund it through repayment of the bonds in the trust fund. Which is fine at one level, because a higher percentage of income taxes are paid by the wealthy who can afford it. But they are quite unhappy about it and they are making their displeasure known. It turns out that the rich are like any other improvedent borrower, they were perfectly happy reap the benefit of the government borrowing from the SS trust fund through lower taxes, but they are REAL unhappy to pay that money back now that that SS is redeeming “bonds.”

      *I don’t want to get into a MMT fight here, but the government can’t go around handing out ponys and paychecks to everybody without provoking Venezuela-like inflation. Taxes and expenditures don’t have to line up exactly, but they have to be on speaking terms.

      1. jonhoops

        Proof that handing out Ponys causes hyper inflation please. I would contend that hybrid warfare, losing control of currency sovereignty though dollarization and a Compradore fifth column is a more likely cause.

      2. Milton

        What about all the ponies we hand to the generals and defense contractors. I would like to see the military budget needing to be prefunded.

      3. Jamie

        A lot of discussions like this one focus on one element and proceed to talk about how that one element can or cannot vary, without considering how everything is interconnected and also variable. I feel like talking about demographics within the context of production “as it is” is like that. It feels like talking about an equation but only considering one term. The point of an equation is to take note of the relationship(s) between multiple terms. One of the political discussions the USA needs to have as a country is the discussion about how much production should go to caring for the elderly. But you can’t have that discussion without talking about how we produce everything and why. I agree that fighting about MMT ideas is non-productive. I don’t think the solution is to give everyone ponies. I think the solution also has to recognize that there are real limits to what can be produced and what should be produced. And there are real issues about who gets to decide these things and how they are decided. I didn’t say the discussion would be easy. I just said I think the place to start is not with a 1988 compromise, but back in the justifications for the whole system “as it is”.

  5. Wukchumni

    It’s only about 1999 days, 11 hours, 37 minutes and 11 seconds until I can claim my first S/S check, but i’m not anxious or anything.

    1. BlueMoose

      If nothing changes, I can start collecting via early retirement in 1 year. I would be amazed if this happens even for a short time. I live in Poland at the moment, have no debt, own 2 houses and property, still working and still (apparently) healthy. If SS starts for me, I will drop back to 20 hrs/week in a support role and spend more time on the farm. I’m not optimistic, but at least I have a plan.

      1. d

        why would they pay some one in Poland? i thought SSN is US territory only. i could be wrong about that,

        1. Expat2uruguay

          Why wouldn’t they? People contribute to social security through their US earned income to cover costs in retirement. These costs don’t go away just because they left the country.

          Even though expats don’t continue to pay Social Security taxes on their foreign earnings, they do continue to pay us federal taxes, although foreign income taxes are credited against the amount. Or at least that’s my understanding.

            1. tegnost

              On income…

              The analysis yielded four results. First, higher income was associated with greater longevity throughout the income distribution. The gap in life expectancy between the richest 1% and poorest 1% of individuals was 14.6 years (95% CI, 14.4 to 14.8 years) for men and 10.1 years (95% CI, 9.9 to 10.3 years) for women. Second, inequality in life expectancy increased over time. Between 2001 and 2014, life expectancy increased by 2.34 years for men and 2.91 years for women in the top 5% of the income distribution, but increased by only 0.32 years for men and 0.04 years for women in the bottom 5% (P < .001 for the difference for both sexes). Third, life expectancy varied substantially across local areas. For individuals in the bottom income quartile, life expectancy differed by approximately 4.5 years between areas with the highest and lowest longevity. Changes in life expectancy between 2001 and 2014 ranged from gains of more than 4 years to losses of more than 2 years across areas. Fourth, geographic differences in life expectancy for individuals in the lowest income quartile were significantly correlated with health behaviors such as smoking (r = −0.69, P < .001), but were not significantly correlated with access to medical care, physical environmental factors, income inequality, or labor market conditions. Life expectancy for low income individuals was positively correlated with the local area fraction of immigrants (r = 0.72, P < .001), fraction of college graduates (r = 0.42, P < .001), and local government expenditures (r = 0.57, P < .001).

              They should pay because they are the ones collecting.

        2. Procopius

          Yes, you are wrong. I’m retired from the Army and drawing my Army pension and Social Security in Thailand. There are disadvantages — I don’t get to use Medicare — but this is where my family lives. My Social Security pension is a benefit that I paid for and I an entitled to it. I pay income tax every year, too.

        3. Ginavon

          Anyone who has paid into SS can collect their benefit in almost any country. There are a few exceptions I’m not sure of all of them but if you are in IRAN you cannot collect while there and a few other countries as well.

      2. Wukchumni

        If my ‘entitlement’ for which I put in $XXX,XXX.XX is there for me, that’ll be great. But the truth is, i’ve made other plans and am not dependent upon it being there, in fact, I reckon that by the time I get my first check, it’ll be in the four figures, only it won’t buy much of anything.

        Not dissimilar to what happened to retired Soviet citizens post 1991.

        1. pretzelattack

          it’s nice that i don’t have to dip into my savings, which i guess will help me when the climate change wars start. 1 way ticket to mars, yessir.

    2. jrs

      I count down the years, ok so it’s awhile but yes. I hope I don’t starve to death and die in a gutter before I’m allowed to have some money just because everyone deserve to live already but … tattered and exhausted by then still I hope to make it.

  6. antidlc

    I don’t know how much of an impact the following has had, but some benefits are exempt from FICA:
    Deductions Exempt From FICA

    Qualified benefits offered under a cafeteria or Section 125 plan are exempt from FICA. This includes contributions made toward a medical, dental, vision and accident insurance plan and toward a flexible spending account, such as dependent care assistance and medical care reimbursements. Payments toward health savings accounts and group-term life insurance of $50,000 or less, plus qualified transportation expenses and disability insurance, are exempt from FICA.

    Also, take a look at one of the proposals floating around:

    The Tax Cuts and Jobs Act is likely to reduce the percentage of Americans who itemize – and thereby have access to the charitable giving tax deduction – to less than ten percent, eliminating much of the tax incentive to contribute. Enter Dan Rashke, CEO of TASC, the man behind The Greater Give, a campaign in favor of legislation that would allow employers to set up Flexible Giving Accounts (FGAs). With an FGA, an employee could dedicate a portion of their pre-tax compensation to philanthropy, thereby expanding the federal tax incentive while reducing employers’ payroll tax obligations.

    So an employee gives to charity through some sort of payroll deduction and the employer does not pay FICA on that amount? Won’t this make the SS shortfall even worse?

  7. Bruce krasting

    LP: As a Gen-Xer, that has always stuck in the craw because those years of collecting Social Security were taken away before I was old enough to vote!

    TG: That’s correct.


    1. jrs

      As a youngerish Gen Xer it is absolutely correct. 1983, I was definitely WAY too young to vote.

      For Gen X: Demographers and researchers typically use birth years ranging from the early-to-mid 1960s to the early 1980s.

      So yea the math is they were mostly too young to vote.

  8. Adam Eran

    The focus on FICA tax is misguided.

    But first, it’s often overlooked that Reagan halved taxes on the wealthy by cutting the top marginal rates. The result: an average business cycle recovery marketed as “Morning in America.” Reagan got the reputation as a tax cutter, even though JFK preceded him in that, and between Reagan and Bush 41 payroll taxes increased eight-fold. … so taxes on the wealthy declined precipitously while the poor got a bigger tax burden. Gosh I wonder why income inequality took off…!?

    Meanwhile, Warren Mosler (correctly, IMHO) advocates eliminating FICA taxes. Taxes don’t provision the federal government’s programs anyway. … and if you disagree, please tell me where people get the dollars with which they pay taxes if government doesn’t spend them out into the economy first?

    1. Procopius

      The symbolism is important. I think terribly important. The fact that people are paying in every week or month gives them more feeling of ownership. That makes them more likely to object when the 0.1% are trying to take it away from them. I could be wrong, I’m socially inept and really do not understand the people around me, but that’s what I think Roosevelt calculated, and he certainly understood human nature.

  9. Joey

    “Federal plan that mandates a prefunded layer on top of social security” oh yay! More federal funds to private financial services!

    Just fund ss and get rid of the false pyramid scheme that is FICA

  10. DJG

    The source of the problem:
    Social Security is designed to be updated periodically, so as time goes on it is always “running out of money” unless it is updated. The FICA tax has been increased 21 times in its 83-year-old history, typically every 2 years. But we have not increased the FICA tax in over 28 years! I

    Whether or not we consider taxes as funding the federal government, it is obvious that this lack of probity in dealing with Social Security is a way to wreck it. Quelle surprise.

    Also, Ghilarducci is guilty of the usual liberal thang: Way too complicated structures with lots of management positions. I haven’t trusted her since she spent time in the Hillary Brain Trust in the runup to the 2016 presidential election.

    1. GF

      Finally, the correct way to solve the problem!! While we are at it, we can double all SS/disability payments which will result in a huge boost to the economy.

    2. Michael Hudson

      This is what sometimes worries me — the ways that MMT may be captured by right-wingers.
      Of course, MMT COULD finance Social Security as its revenues slow.
      But I would not like to see this. Indeed, MMT should NOT be used as an excuse for NOT raising the caps on FICA, for NOT making the tax progressive, etc.

      1. False Solace

        Well, we already live in the world of MMT, and the wealthy already get their wars and welfare. FICA is already regressive, the SS component is already capped at $120k, etc. I know it’s always possible for things to get worse, but would the blame for that really go to MMT?

        I think we’re better off if the average citizen loses their illusions about how the system works.

  11. earthling1

    As with millions of retirees, my Defined Benefit Plan pays enough that half of my SS is now taxed.
    Why not take this tax revenue and return it to the SS Trust Fund from whence it came?
    This would boost the TF beyond 2034 and possibly decades longer.

  12. Tomonthebeach

    This article is overly alarmist because it is way too dependent on macro economic data which so often miss important variables. Parramore annoyed me early on by ignoring the fact that the majority of Americans file for SSA pensions at or before age 62 regardless of full retirement age. Thus, the benefit cut is felt by most Americans. That got me wondering about other overlooked wealth information.

    Retired, I am finishing up a letter to guide my much-younger surviving spouse in finding all our income sources, bank accounts, liquid and nonliquid assets, etc. when I die (hopefully decades off). It was eye-opening to see how complex that task was for an N=1 report. It is baffling how a researcher could find so much diverse information on the US population that has so far taken me over 30 hours to hunt down and quantify.

    One likely example of error is the misleading empty/missing 401K/IRA result. Finance pundits rant about this factoid. However, such startling data help sell investment accounts. In whose interest is it to be accurate? Such results are often derived from survey data and extrapolations. I have heard several retirees say things like: “It’s nobody’s business but mine where I put my money. You never know what these so-called survey people are going to do with what I tell them. I tell them I’m broke so they will lower my taxes and Medicare premiums or something.” That makes me wonder about the validity of the infamous and unchallenged $400 emergency funding shortfall report.

    Older workers have many assets often ignored by researchers because it is challenging to obtain the data. Savings are only insured to $100K, thus many people who view stocks as gambling rely mainly on savings accounts, CDs, and the like. Such policies require having accounts at multiple banks. Many people also started a variety of investment schemes during the pre-IRA era, and those too are usually off the radar. When IRAs started, you could not consolidate savings and pop it all into a 401K or IRA. That money stayed where it was, or some people ignored the 401K/IRA altogether.

    Older workers also have inherited wealth from deceased parents and other family members. It might be an out-of-state house now rented or rented farmland in Idaho. It might sit in trusts, insurance policies, equities…. That is wealth, but good luck finding it for research purposes.

    Although middle class pensions are disappearing, government employee and senior management-level pensions are still robust. Validity requires an income-level moderator correction at minimum. I rarely see that done.

    Houses and condos often are used by people of lesser means to produce retirement income. Ever wonder how retirees wind up in trailer parks? They liquidate their housing wealth, invest the proceeds in a lifetime annuity, relocate to a low-COL area, and rent a mobile home with the monthly payout. Others rent small apartments. That enables an SSA pension to cover living expenses.

    Of course, seniors are filing for bankruptcy more often – the Great Recession! There is a negative correlation between age and health, retirees are more vulnerable to medical bankruptcy (the #1 cause of filings – thankyew Trumpies). That will likely taper off in a few more years as recession victims expire. Of course, that fact surely is downright medieval.

    So, while there is some evidence suggesting that Americans are unprepared for retirement, it is not very reliable, and of debatable validity. Due to various government policies, people have wealth hiding all over the place in plain sight, dispersed in ways that make consolidation for valid economic analysis impossible. Thus, finding valid data on retirement wealth is, at best, a snipe hunt.

  13. nihil obstet

    Contributing to the alleged shortfall in Social Security funding now and to the serious problem for today’s workers’ aging is the gig economy and the failure to enforce labor laws. Wage theft is rampant, as is the misclassification of workers as independent contractors. I would guess that a fair number of gig workers have no clue about paying self-employment tax, much less the employee’s share of FICA. I think we’re going to see a wave of retirees with very little credit in Social Security in the next generation. We will need a source of income for them not tied to reported earnings.

    1. jrs

      Before that we are going to see massive poverty, massive, it will be everywhere. After 2008 you had lots of unemployment but many of those people actually qualified for unemployment payments, even the full 99 weeks back then. In another recession those gig workers won’t and I don’t think they have a lot of savings either. It will be ugly beyond what almost anyone expects. When the tide goes out we will see who has been swimming without a safety net.

  14. steven

    Donald Trump is occasionally capable of saying (as opposed to doing) the right things. If we want to keep Social Security financially viable we should keep the jobs that fund it here in the U.S. – even if that means paying more at Walmart for your next TV. Similarly, if we want to leave a habitable planet for the next generation we should impose tariffs equal to the (few) costs of the ‘externalities’ we make domestic producers pay rather than just allowing foreign producers to pocket them.

    As for just printing more money, as Clinton used to say, ‘that dog won’t hunt anymore’, given foreign central banks loaded to the gills with Western government debt.

  15. lambert strether

    A public option for Social Security because, as everybody knows, the lack of a public option is the only thing wrong with ObamaCare.

    Haven’t I been saying for ages that the “public option” brain worm would drill into retirement discourse? Here it is. And from liberals. Yeah, in the spirit of bipartisan compromise, let’s have a Retirement Marketplace just like the ObamaCare marketplace. Because you know that’s what this will turn into. Gotta keep those fees rolling in!

    Low fee? Why not no fee!

    1. jrs

      Speaking of public options, if it really is a social policy to keep people working in their 60s we simply must have single payer before 65. Otherwise the discrimination against older workers in part because of costs is just too intractable.

  16. Jonathon Gregory

    Yes, there is a cap on SS income that is taxed, but there is also a cap on SS benefits that are paid.

    SS is not a regressive structure. There is a benefits formula that pays lower income earners a higher percentage of benefits. The benefits formula decreases until upper income earners receive less. It is called SS Bend Points, and can be found here. Plus, upper income earners now have their SS benefits taxed.

    Shame when people can’t even look up simple facts.

    1. kernel

      JG – thanks, I guess; I didn’t know about the “bend points” for SS payouts, so I just spent a couple hours trying to make sense of them. Indeed, the payouts are technically VERY “progressive” – the lowest earners get roughly 90% of their prior wage, and the net % decreases drastically from there up. The Bend Points are pretty damn low: current retirees would get…
      … 90% of the first $10 K of income
      … 32% of income between $10 – 65 K
      … 15% of income above $65K, up to the FICA Cap (128K, IIRC?)

      So, someone retiring this year from a job paying $10K/yr would get $9K from SS next year (roughly); but a $50K wage (approx. median US wage?) would get you less than $23K in SS, and a $100K/yr job would get you just over $32K.

      Ouch. Devil’s in the details, eh?

      Interesting detail: the “cap on benefits” only results from the cap on the pay-in; so it would still make sense to add a true “benefit cap” if/when we kill off the FICA tax cap.

  17. ACF

    When considering the elderly poverty crisis that is only beginning, it is important to remember the foreclosure crisis. An enormous amount of wealth went “poof” when houses bought with real down payments went underwater; an enormous amount of wealth went “poof” when servicers wouldn’t negotiate and people liquidated 401ks to pay mortgages; an enormous amount of wealth went “poof” when homes were lost.

    Many people use their homes to subsidize/fund their retirements (subsidize, b/c once the mortgage paid is off, the cost of housing is low; and fund, because by down sizing, selling and moving to cheaper markets, or reverse-mortgaging, people cash out their equity.)

    Social Security’s inadequacy is only part of the problem.

  18. Altandmain

    The biggest barrier isn’t anything technical, it is that our society’s rich are really, really greedy and don’t feel any obligation to society as a whole.

    There is no other way around this – they effectively control the majority of our politicians through their campaign contributions and will aggressively fight any efforts at serious reform. Until we are prepared en masse to fight this barrier, there is really not much we can do.

    The US could do a ton of things, such as eliminating the social security cap, a financial speculation tax, etc, but this will mean overcoming the rich.

  19. john c. halasz

    I think MMT is over-promoted on this site and isn’t exactly the answer to every problem. Besides it’s nothing new, but goes back to Abba Lerner’s functional finance and neo-chartalism, which Keynes already discussed from prior antecedents. (Only the employment guarantee as fiscal buffer stock regulating the economy is original to the doctrine and I find that dubious). Nonetheless, even if a prior tax base isn’t necessarily required for fiscal expenditures, there still remains competition for real economic resources between different social ends and priorities and real financial constraints, even if not neo-classical ones. So yes, what you tax and how you fund remain relevant issues.

    As to retirement “savings”, all retirement consumption incomes are paid out of current production. There’s no such thing as “saving” current production resources and transporting them 20 or 30 years into the future, and even if that were possible, the hoarding of productive resources would damage not just the current economy, but the future one which partly derives from current decisions. It is perfectly possible that there could be inter-generational conflict over available productive resources and distributions in the future, but the degree that it could be so doesn’t depend on exactly how future obligations or entitlements are currently financed. If tax revenues prove insufficient to meet all claims and investment requirements, then savings in financial “assets” would also be insufficient, because they derive from one and the same productive economy. It’s more a matter of accounting and distributional conflicts than actual economics.

    There’s no problem with SSA that can’t be easily fixed. Simply remove the income cap and the artificially dire projections disappear. The program is moderately regressive in its taxation and moderately progressive in its payments. The problem isn’t wages exactly; rather it’s projections of future productivity. Current beneficiaries receive their payments based on current levels of productivity, when they paid in based on wages at lower levels of productivity, and in the future the levels of productivity, for a number of reasons, can’t be guaranteed, though that doesn’t mean abject poverty for retirees. In fact, I think SSA benefits currently should be increased, given the recent financial debacle that has deprived households of their net worth and future asset returns via ZIRP, etc. and perhaps other tax sources should be found to enhance the program. But I wouldn’t be in favor of abolishing the SSA tax. For one thing the U.S. needs a national carbon tax, (because, among other things it would be imposed on imports, which at $3.5 tn annually, is a large slice of global demand and would effect other nations accordingly, even if we are the biggest carbon pigs in the neighborhood and a carbon tax is not sufficient to curb our own excesses). The SSA tax system would be the best available one to rebate the tax, since it covers most of the population and gaps could be readily plugged.

    But I wouldn’t want to use the “fiscal space” of deficit and debt public financing, under any description, simply to repair benefit schemes. Rather I think it should be used primarily to finance the immense needs for transforming our capital stocks and infrastructure to meet the dire challenges of AGW&CD and environmental and resources limits. And I would want to set our minds on taxing both the wealth and income derived from financial assets, in a sharply progressive manner, since those derive from claims on the underlying real progressive economy based on accumulations of fictitious capital and/or under-investment/asset-stripping from existing productive assets without renewal.

  20. Gregory Etchason

    If the Government can “keystroke” payments for wars and Wall Street bailouts.
    Those same “keystrokes” can keep the elderly from destitution.

  21. Charles Yaker

    until MMT is understood and accepted by the general population and the people that represent them there will not be an honest discussion of any financial issue. Even Bernie who I strongly suspect understands MMT panders to the Neo Liberal nonesense we need. Political leaderS who will come out and take a stand. Then maybe we can have nice things

    1. Wukchumni

      MMT only makes sense if you are the world’s reserve currency, otherwise it’s a recipe for hyperinflation, not that there’s anything wrong with debauchment of one’s currency.

  22. Christopher Tobe

    I tend to tune TG out since she got in bed with Blackstone. Just increase SS, this new government plan exempt from ERISA would become a giveaway to Blackstone KKR and others

  23. kk

    You have a vote. If you want higher retirement benefits, free health care and less war all you have to do is turn up and vote for these things. Problem is you want to have low or no taxes for you and high quality benefits as well, and nothing for other guy (who doesn’t deserve these things as they didn’t “serve, work, be patriotic, be male, native born” etc…….

    1. nihil obstet

      By “class warfare”, you must mean the upper class will successfully convince the workers that their problem is those other workers who are getting too much! The upper class will then grab the few crumbs left while the workers fight each other to make sure the plate stays empty. Another victory for the upper class in the great class war! Instead of getting upset over the “huge fixed pensions” that govt employees get (in my state, it’s well under $20,000 a year, which only the upper class considers “huge” for a worker’s annual income), all workers ought to be angry over the pontifications that the richest country in the world is unable to provide all its residents with a safe and dignified old age.

  24. Knute Rife

    I have a steady stream of retirees coming to me for bankruptcy protection even though they have only Social Security income and are effectively judgment-enforcement-proof. They generally fall into the following categories:

    1) They have back taxes, and their Social Security checks are being reduced to pay them.
    2) They lost their job in their 50s, tried to start a business with an SBA loan, defaulted, and their Social Security checks are being reduced to pay it.
    3) They lost their job in their 50s, tried to get retraining, took out student loans, defaulted, and their Social Security checks are being reduced to pay them.
    4) They just want to make the phone stop ringing constantly from collection calls.

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