NW Social Security Plan

Close actuarial balance means that the Social Security Trust Fund does not drop below a level that will fund costs for the next 10 years.  At the current payroll tax rate we will be out of close actuarial balance in 2019.  (Using numbers from the 2015 annual report) if we increase the tax rate by 0.2 percent each time the test fails, we will need to raise the rate to 16.2 percent (combined employee and employer contributions) by 2080.

At no point will the Trust Fund ratio drop below 1.

2012 Payable Benefits

 

The number are a bit different, but the character is unchanged.

Scheduled Social Security Benefits

According to the SSA annual report, the Trust Fund will be depleted in 2037. If that happens what will happen to people's benefits?

Currently, initial benefits for new retirees go up every year by an amount indexed to the increase in average wages. Since average wages go up faster than inflation, the value of benefits is going up. The chart (with data from suplemetary table VI.F10 of the report) shows this increase. It has gone up in the past. It will continue to go up according to "scheduled benefits" (the blue line, as long as the TF is not depleted. If the TF is depleted as projected by the report, then available funds would be enough for intial benefits to follow the red line.

Useless Comments

Useless comments go here.

Wealth Distribution - Mean and Median by Age

From 2007 Survey of Consumer Finances
4. Family net worth, by selected characteristics of families, 1989–2007 surveys

Mean Net Wealth is higher than median, so the distribution is skewed toward the higher net wealth.

The ratio of mean to median has increased for every group except 75 or more, so the distribution has become more skewed.

Median wealth begins decreasing for people entering the 65+ age group. Mean welath increases even after age 65 in 2007. This changed between 2004 and 2007. The 2004 data (which is also in Table 4), shows mean wealth decreasing after 65.

More Misleading

Charts of the other two data sets.

Misleading?

This chart shows data from the 2008 BLS Consumer Expenditure Survey
http://www.bls.gov/cex/#data
The data is calculated by dividing household income by the number in the household.

Part of this data was included in a comment on EconomistMom, but only the red highlighted part. The poster said, "We again see that per capita income, expenditures, and “food&fun” are highest for the oldest group ..."

This has got to be one of the grossest examples of misleading use of data that I have ever seen.