When Kathleen Casey-Kirschling signs up for
Social Security benefits Monday, it will represent one small step for
her, one giant leap for her baby boom generation "” and a symbolic jump
toward the retirement system's looming bankruptcy.
Casey-Kirschling "” generally recognized as the
nation's first boomer (born in Philadelphia on Jan. 1, 1946, at
12:00:01 a.m.) "” won't bankrupt the Social Security system by taking
early retirement at 62. But after her, the deluge: 80 million Americans
born from 1946 to 1964 who could qualify for Social Security and
Medicare during the next 22 years.
The first wave of 3.2 million baby boomers turns
62 next year "” 365 an hour. About 49% of the men and 53% of the women
are projected to choose early retirement and begin drawing monthly
Social Security checks representing 75% of the benefit they'd be
entitled to receive if they waited four more years to retire.
If Social Security were a well-managed private insurance program, this would be a non-event. The returns on investments over the last 40 years have been tremendous, such that a private fund could easily start paying out benefits based on boomers' premiums.
Unfortunately, as a government program, the funds in the program are subject to the whims of politicians. And it turns out that boomers have elected politicians who have spent all the money that has been contributed to Social Security (despite USA Today in their graphics trying to continue the myth that a meaningful "trust fund" actually exists as anything but a bunch of government IOU's to itself.) So, because Congress has spent all the past contributions, an action that would have had any private manager jailed decades ago, Social Security must now run itself as a Ponzi scheme, where current contributions pay off retiree benefits. This game runs out somewhere in the 2020's. And this all despite the fact that Social Security pays out a negative rate of return.