Discuss whether the following statements are true false or u

Discuss whether the following statements are true, false, or uncertain. Explain your answer in five lines or so.

(8) We saw in class that in 1991, the median American aged 51-61 had: $107K in expected Social Security wealth, $16K in private pension wealth, and $3K in other retirement funds. These numbers show that we need Social Security to make sure that Americans save enough for retirement.

(9) If life expectancy rises, then the only way to restore financial solvency to a Social Security system is to raise taxes or cut benefits.

Solution

(8): Simply look at the given figures for the Year 1991 :

Firsg thing to note, it is the data about average median class.

Amount of Investment in Social Security Wealth = $107K

Amt of Investment in private Pension wealth : $16K

Amt of Investment in other retirement benefits : $3K

Proportion of Amt being invested in Social Security is quite high as compared to other things.

As a Social Security recipient, you\'ll receive a modest monthly income for the rest of your life, no matter how long you live and no matter what happens in the economy. You\'ll enjoy a basic level of retirement income that you can\'t blow or lose -- at least, not all at once. After your death, an income will continue to your surviving spouse for the rest of his or her life. So, we need social security not only for the reason that American save enough for retirement but also for the reason that You receive a consistent Income after retirement no matter how economy goes. So from economy\'s point of view, Social secutiry is not just about the retirement benefits. So statement is False.

(9): If life expectancy rises, the way to financial solvency is can be to raise taxes or cut benefits on Social Security.

But it must be done looking at all the aspects. Subjecting Social Security benefits to taxation is curious on several fronts. For one thing, the benefits you receive are ultimately in exchange for taxes you\'ve paid — recognizing, of course, that they may be far more or far less than the taxes actually paid. Either way, it amounts to double taxation, which most people don\'t see as fair.

More significantly, benefit taxation is just another cog in Social Security\'s massive wealth redistribution machine, serving, in effect, as a partial means test. So why call the reclamation of benefits created by this income tax a tax, and why limit it to roughly one-third of the benefit? Instead, why not fully means test the benefit — through both an income and a wealth test — and provide for the full elimination of the benefit in any year in which income and wealth surpass certain thresholds? After all, Social Security provides a floor of income protection for the elderly — a safety net. But not everyone needs that safety net.