Frankly I don't know why people think they're entitled to retire. Well, okay, I do, it's because the government has been telling them they're entitled to it. But I think that's wrong. People should be allowed to work for as long as they want to, or they should have to work for as long as they need to.
LW, your mom should certainly be able to pull out whatever funds (with suitable interest) she has contributed to SS. Should she be guaranteed that she'll be able to live on her SS income? No. Should she, if she's only paid in (for example) $25000, be awarded $75000 in benefits? I don't think so. But I don't care how long she works. If she wanted to retire 5 years ago, she should have. If she doesn't want to retire until she's 90, she can go right on working for all I care.
My point being, retirement is like any other major life event: it has to be bought and paid for in some form. You don't get to retire just because you turn 65. If that's the case I'll quit my job, go live on the streets, and wait for my SS jackpot to come in. Retirement needs to be planned, budgeted, and shepherded to a successful conclusion.
Fortunately you have a LONG time to plan and save to do it right. Relying on SS used to be a very simple way to do it, but with the changes in longevity and the political willingness to raid the SS cookie jar, it will end up as an unsupportable boondoggle in the near future and be unable to pay out the benefits that it's supposed to. Other alternatives need to be implemented.
And they are available. 401(k), traditional IRA, Roth IRA, tax-free bonds, even regular stock or mutual funds all work extremely well over the long haul thanks to the power of compound interest.
I agree that it would not be fair to the people who have paid money into SS not to get it back out eventually, or to have to keep working after they've been told all their lives that it'll kick in at age 65 (or earlier, in some cases.)
What I think we should do is, stop any new enrollment in SS. If you're born after (say) 1/1/05, you may get an SSN, but it's strictly for Government ID purposes; you don't actually have an SS account. Everybody who's currently paying into SS keeps paying in, everybody who's paid something in will get their payments out eventually, everybody who's getting payments now keeps getting them. In order to fund this, companies (who already pay 1/2 of your SS tax) would keep paying SS even for people who don't get SS, until they have nobody who actually gets SS on their payroll anymore (or until SS is solvent (ha!)).
Of course I have no idea whether that would actually generate enough income to cover all the SS debt and shortfall, but it's better than letting it keep going down its current death spiral.
