>>>>1) FICA taxes were designed to be sufficient to provide a benefit to the non-working spouse of a working spouse.
>>>>Now both husband and wife work and contribute. What has happened to all the additional funds from the previously non-working, but now-working, spouses?
Demographics. There are now fewer workers paying the benefits of each SS recipient. People are living longer while collecting SS benefits. SS is a largely pay as you go system.
>>>>2)In the FAQ it is stated, "What interest rate does Social Security earn on our money? "According to the 1998 Trustees Report, the effective annual rate of interest earned by the assets of the Social Security retirement and disability funds during 1997 was 7.5%"
>>>>The latest data I've seen stated that the current rate of return is 2% or less, compared with 5+% for private investors in Federal securities. Please explain the discrepancy.
Anybody stating a 'current rate of return' for SS (for example 2%) is misleading you. The 'rate of return' will vary widely depending on an individual's circumstances, especially their average salary. In general, the higher the salary (below or equal to the FICA max), the lower the 'return'. The 7.5% return is for the Treasury securities in the trust fund. This is the weighted average, including many securities issued at a time of higher interst rates. The rate of return in the SSTF IS NOT RELATED TO the 'rate of return' for an individual getting SS benefits. This Trust Fund is merely set up to help pay SS benefits in the out years when the payroll tax will no longer meet the SS benefits paid. Individuals do not have their own 'account' on which they receive fixed returns.
>>>>3) The Administration admits it sometimes improperly pays benefits. As it has a fiduciary responsibility, shouldn't any improper payments be reimbursed to the fund through general revenues or legal actions?
I'm sure they do that when they can. Realize that such 'enforcements' are NOT FREE and are not always successful. Also, we all have right of due process. Who can say what is the proper overhead to incur for 'enforcement'. Also note that those being 'enforced' can often bring political pressures (through Congressmen and other politicians) to bear on the SSA.
>>>>4) Senator Moynahan, a few years ago, was seen on several nationally televised programs claiming that the SS tax was too high--more was being collected than was needed. What happened to all those "unneeded" contributions?
That is what goes into the Social Security Trust Fund and is lent to the US Treasury in exchange for interest bearing US Treasury Securities (See #2 above).
>>>>5) Almost half the time that I have requested SS earnings reports on my and my wife's contributions, the values quoted us were wrong--low each time. One can therefore surmise that the SS Administration has paid less benefits than it should have to all those people who never had their contributions corrected. Where has all the money gone?
I'm not disputing your story, although I have never met anybody who has had that problem, with the exception of the most recent years, which have not been posted yet. The earnings reports always remind you to report discrepencies to the SSA. That is one of the reasons you should request those statements every couple of years, so that you still have documentation to help correct their records, if in error.
>>>>6) We are told that there are an unusually large number of children reaching school age. At about the time the SS account is suppoosed to be inadequate, they will be adults with jobs, contributing to the account. So what is the problem? Could it be that there is an expectation in the Administration that either the jobless rate will be high or that the median income will have declined due to global competition?
I think the 'unusually large number' just relates to recent years, and not the Demographics created by the 'baby boom'. That area is not my strong point.
