Social Security: Many pay more than they'll get back

Up until now, Social Security has been a windfall for many retirees: They collected far more in benefits than they shelled out in taxes. That's changing. Many of those retiring will have paid more into the coveted entitlement program than they will get back.

Here are the numbers:

A couple who each earned the average wage during their careers and retired in 1990 would have paid $316,000 in Social Security taxes, but collected $436,000 in benefits, according to data crunched by Eugene Steuerle, an economist at the Urban Institute.

Had that couple turned 65 in 2010, however, they would have paid $600,000 in taxes, but could expect to collect just $579,000. This is the first time in the program's history that taxes outweighed benefits for this group, a couple with average earnings.

The imbalance will get more pronounced for future generations of retirees. Couples now in their early 40s will have forked over $808,000 in Social Security taxes by the time they retire, but get back only $703,000 in benefits. Read more >>

Jobs for seniors represents the lion's share of 4.2 million job gain

The number of workers age 55 and up grew by 3.5 million from September 2009 to September 2012. That represents the lion's share of the gain of 4.2 million for all workers 16 and older, according to the Bureau of Labor Statistics. Two factors help explain the trend.

First: demographics. In the three years ended in July, 86% of population growth among people ages 25 to 69 came in the 55 to 69 age range, says Richard Johnson, director of the program on retirement policy at the Urban Institute, a nonprofit research group. That increase comes mostly from the baby boomers, who began turning 55 in 2001.

"There are many more Americans turning 55 in recent years than turning 25," Mr. Johnson says.
Second: changing attitudes. More employers are recognizing that older adults bring skills and experiences to the table that can help the bottom line. Read more >>

Insurance industry's reaction to Obama's healthcare initiative is "Hallelujah!"

Image by Public Citizen via Flickr

Since Obama's version of healthcare would require all citizens to have health insurance, insurance companies are guaranteed tens of millions of new customers, and government subsidies will pick up the tab. "It's a bonanza," said Robert Laszewski, a health insurance executive for 20 years who now tracks reform legislation as president of the consulting firm Health Policy and Strategy Associates Inc.

According to the LA Times, insurance industry rallied its lobbying and grass-roots resources so successfully in the early stages of the healthcare overhaul deliberations that it is poised to reap a financial windfall. Some insurance company leaders continue to profess concern about the unpredictable course of President Obama's massive healthcare initiative, and they vigorously oppose elements of his agenda. But Laszewski said the industry's reaction to early negotiations boiled down to a single word: "Hallelujah!"

"The insurers are going to do quite well," said Linda Blumberg, a health policy analyst at the nonpartisan Urban Institute, a Washington think tank. "They are going to have this very stable pool, they're going to have people getting subsidies to help them buy coverage and . . . they will be paid the full costs of the benefits that they provide -- plus their administrative costs."

The proposal that most concerns insurers is the "public option" insurance plan, so the industry launched a campaign on Capitol Hill against it, "grounded in a study published by the Lewin Group, a health policy consulting firm that is owned by UnitedHealth Group. The lobbyists contended that a government-run plan, which would have favorable tax and regulatory treatment, would undermine private insurers. Recent support for the public option has declined, and the stock prices of health insurance firms have been rising."