Happy 73rd Birthday Social Security – that’s a lot of candles…

Today, August 14th, is the anniversary of the date the Social Security Act was signed. In 1935, President Franklin Roosevelt approved the law, which provided for a continued income stream after retirement.

Over the past few years, Social Security has been a hot topic among politicians.

President Bush’s administration has repeatedly advocated a “partial privatization” of Social Security; whereby individuals would manage their own retirement funds, similar to the Thrift Savings Plans of government workers. Bush’s proposal met with a lot of opposition, publicly, and politically. Although he made the plan a priority in each of his administrations, it has not been embraced.

In the current race for the presidency, Senators John McCain and Barack Obama have very different views. John McCain supports a partial privatization of Social Security while Barack Obama’s plan to “save” Social Security involves a payroll tax increase, but only for those earning over $250,000 a year.

So what is the true state of Social Security – what measures do lawmakers need to take today to ensure that those paying into the “system” will receive a return on their savings?

According to a former chief of staff of the House Committee on Aging, Robert Weiner, not much.

He contends that Social Security, without any increase, has a projected solvency through 2052 – and after that it would be 80% funded. Weiner says that the drain on the government is not the payment of Social Security benefits, but Medicaid (due to soaring healthcare costs).

Strategists have been discussing the eminent doom of the system for decades and every “expert” seems to have a different prediction of how long Social Security will last and on how (or if) it can be saved.

Where do you stand on Social Security reform?