The following is an excerpt from CBSNews.com | July 6, 2016 |
Given the recent release of the Social Security trustees' 2016 report on the status of the national retirement system, now seems like a good time to address a misconception that political candidates and ordinary citizens alike often repeat: Congress raids the Social Security trust fund and spends it on favorite pork-barrel projects.
This story evokes images of politicians striking deals behind the closed doors as they fritter away Americans' hard-earned Social Security taxes, sure to leave us destitute in our retirement years.
But that's just not accurate. The reality is that from 1983 to 2010, Social Security collected more FICA taxes from workers than the amount of actual benefits paid to retirees. This excess helped build a trust fund of $2.8 trillion by the end of 2015, a fund that will help pay for the benefits of baby boomers when they ultimately retire.
This surplus has been invested in special U.S. government bonds that are legally obligated to pay the stated, market rate of interest, and then repay the principal when they mature.
These special bonds are just part of the federal government's overall funding. The assets in the Social Security trust fund represent about 15 percent of total government debt in 2016.
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