Q. I'm 75. I’ve read a lot over the years. Recently, you answered a reader question on the looting of Social Security. You stated, I believe, that the federal government is not stealing Social Security. I have read or seen too many items in articles and on TV with too many speakers who stated and believed that Social Security money has been taken for the personal gain of people from the federal government.

You are one opinion with one belief and from the other side. But there are many, many believers with the opposite opinion.

Given the reputations of "Uncle Sam's boys" and the many times some of them wound up in prison, maybe you'll understand why I think you gave the reader the wrong truth. --- J.S., Antioch, IL

A. You should be more careful about the quality of your sources. Let me explain why. Every dime of employment tax money is accounted for. The surplus money since the 1983 reforms has gone to the U.S. Treasury, which then deposits a credit for it in the Social Security Trust Fund.

As those bonds have accrued interest it has been deposited in the trust fund as new Treasury obligations. Today the Social Security trust fund has about $2.8 trillion in Treasury obligations.

There are two ways to interpret this. One is that the Social Security trust fund holds claims worth $2.8 trillion on the U.S. Treasury. It is considered to be the pinnacle of creditworthiness. As benefit payments continue to increase and exceed the revenue from both employment taxes and the taxation of benefits, Social Security will present some of the trust fund bonds for redemption to cover the shortfall. That will continue until the trust Fund is exhausted. According to the most recent Trustee’s report, this will occur in 2034 for the combined old age and disability funds. Here is a link to the figures: https://www.ssa.gov/policy/trust-funds-summary.html

The other interpretation is that surplus money was taken and spent. And it was. It was, however, not taken “for the personal gain of people from the federal government.” It was used to support government spending programs of various kinds. The programs may, or may not, have had merit. It was also used to cover lost revenue from tax cuts.

With one party that sees spending as investment and another that believes no tax should go uncut, the long-term result is a guaranteed growth of government debt. Basically, our government has grown its debt to a worrisome amount.

The only way to cover promised Social Security benefits in the future would be to increase taxes so that $2.8 trillion can be paid out in benefits. Or cut benefits.

Either way, this is an enormous burden to put on the workers who are now paying the taxes— and who expect their share of promised benefits in the future. That is the real problem. It is not something that can be found at the end of a pointed finger. It’s not that simple.

Why should you believe me? Well, for one thing I’ve been studying the subject for over 30 years— long enough that I’ve co-authored two books about it. MIT Press published both books. Nobel laureates endorsed both books.

Q. How is income generated from an index fund? We are retired. If we put our money into an index fund and only receive money if we sell the stock, please explain how that is a good retirement strategy? ---L.J., by email

A. Let’s step back a bit. A mutual fund is only an instrument for holding investments. An index fund is a mutual fund that holds investments that will duplicate the performance of a particular index. Both are containers for stocks and their earnings.

When a fund of any kind holds assets— stocks or bonds— those assets have earning power. In the case of stocks, the earning power is distributed as dividends. In the case of bonds, the earning power comes out as interest payments.

Fund shareholders receive annual distributions of fund earnings. Some people elect to reinvest those earnings in additional shares. Some spend the distributions. Whether the distributions are spent or reinvested, they are a taxable distribution.

If you need more money than regular distributions, you can redeem shares. If they have risen in value, you’ll have a capital gain and will need to pay taxes on it. Some of the money will be your original principal, so it will not be subject to taxes, provided it is from a taxable account, not a retirement account.