As the Bush administration gears up to privatize Social Security, here is our quick reference guide to help you keep track of the numbers.
Beneficiaries:
Number of Social Security beneficiaries (in 2004): 48 million
Number of early retirees receiving Social Security (in 2003): 21 million
Number of disability benefit recipients (in 2004): 8 million
Number of survivorship benefit recipients (in 2004): 7 million
Number of children receiving Social Security benefits (in 2003): 4.0 million
Number of college students receiving Social Security benefits (in 2003): 128,000
Benefits:
Average monthly retirement benefit (in 2003): $922.10
Average monthly disability benefit (in 2003): $861.70
Share of income of 65 year olds coming from Social Security (in 2002): 60 percent
Additional share of those over 65 in poverty without Social Security (in 2000): 40 percent
Trust funds:
Social Security tax rate: 6.2 percent for employer and employee each
Income cap above which income is not subject to Social Security tax: $90,000
Total Social Security income (in 2004): $658 billion
Total Social Security benefit payments (in 2004): $493 billion
Social Security surplus (in 2004): $156 billion
Social Security trust funds balance (in 2004): $1.7 trillion
Interest rate earned on trust fund assets (in 2004): 5.7 percent
Administrative costs as share of benefit payments (in 2004): 0.9 percent
Social Security's future:
Date at which Social Security uses interest earned on trust funds to pay benefits: 2017
Date at which Social Security uses trust funds assets to pay benefits: 2027
Date at which Social Security requires general funds (Soc= Sec. trustees): 2042
Date at which Social Security requires general funds (CBO): 2053
Share of benefits payable in 2042 without general revenue (Soc. Sec. trustees): 74 percent
Share of benefits payable in 2053 without general revenues (CBO): 81 percent
Social Security shortfall over next 75 years as share of GDP (Soc. Sec. trustees): 0.6 percent
Social Security shortfall over next 75 years as share of GDP (CBO): 0.4 percent
Size of President's tax cuts vs. Social Security 75-yr. shortfall (Soc. Sec. trustees): 3-to-1
Size of President's tax cuts vs. Social Security 75-yr. shortfall (CBO): 5-to-1
Impact on Social Security
Contributions to private accounts (Bush plan)[1]: 4 percent of payroll up to $1000
Annual increase in contribution limit (Bush plan): wage growth plus $100
Contributions to private accounts when fully phased in (Bush plan): 4 percent of payroll
Share of Social Security that could be privatized (Bush plan): 32.3 percent
Transition costs in 2001 with cuts to disability benefits according to Bush's Commission to Strengthen Social Security's option II (CSSS-II): $2.2 trillion
Transition costs in 2001 without cuts to disability benefits (CSSS-II): $2.8 trillion
Share of payroll necessary to cover transition costs in 2001(CSSS-II): 1.2 percent
Social Security benefit cuts for all
Benefit cut to everyone age 35 in 2002 (CSSS-II): 17 percent
Benefit cut to everyone age 25 in 2002 (CSSS-II): 25 percent
Benefit cut to everyone retiring at 65 in 2075 (CSSS-II): 46 percent
Benefit cut to worker becoming disabled in 2020 (CSSS-II): 11 percent
Benefit cut to worker becoming disabled in 2075 (CSSS-II): 48 percent
Private Accounts
Interest above inflation charged to loan from Social Security to make private account contributions ("clawback") (CSSS-II): 2 percent
Interest above inflation charged to loan from Social Security to make private account contributions ("clawback") (Bush plan): 3 percent
Effective tax rate on private accounts with average rate of return from "clawback" (Bush plan): 100 percent
Effective tax rate on private accounts with high rate of return from "clawback" (Bush plan): 69 percent
Effective tax rate on private accounts with low rate of return from "clawback" (Bush plan): 139 percent
Costs of market risk of retirement benefits in 2005 present value (CSSS-II): $600-$900 billion
Total benefit cuts from privatization
Benefit cut relative to Social Security at age 65 in 2025 (CSSS-II): 16 percent
Benefit cut relative to Social Security at age 65 in 2065 (CSSS-II): 27 percent