Community Manager

🤔 Is Social Security Going Bankrupt?

Forum|Forum|3 years ago
November 29, 2022
24 replies
14264 views

Hello Everyone!

Since going on the Retirement Social Security in 2020, I now "pay attention" to the media coverage saying it will not be around.

I THINK the last news article (senior moment/lol 😂🤣) said program would be out of money by 2035. Yikes! 😱

Any opinions?

Thanks,

Nicole 🙂

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ChaviB814890restAuthor

Community Manager

(1 comment) This is a copy&paste from the Social Secrity Website. I guess I will be going back to work in 2037. 😭 Nicole 🙂

LINK TO INFORMATION ON SOCIAL SECURITY WEBSITE

The concepts of solvency, sustainability, and budget impact are common in discussions of Social Security, but are not well understood. Currently, the Social Security Board of Trustees projects program cost to rise by 2035 so that taxes will be enough to pay for only 75 percent of scheduled benefits. This increase in cost results from population aging, not because we are living longer, but because birth rates dropped from three to two children per woman. Importantly, this shortfall is basically stable after 2035; adjustments to taxes or benefits that offset the effects of the lower birth rate may restore solvency for the Social Security program on a sustainable basis for the foreseeable future. Finally, as Treasury debt securities (trust fund assets) are redeemed in the future, they will just be replaced with public debt. If trust fund assets are exhausted without reform, benefits will necessarily be lowered with no effect on budget deficits.

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bvino56

Contributor ⭐

I do not have the time to plow through all the falsehoods on here. A 25% reduction in benefits is not the same thing as going bankrupt. If the SS tax was extended to the first $200,000.00 of income this problem would go away immediately. SS is not a great deal of money and if people need it to live on I am willing, as a Christian American, to see that they get it. I worked hard all of my life too. Big Deal!. I am comfortable because of it and stand a little less so that others may survive. People are so mean these days.

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john258

Contributor ⭐⭐

SS was set up where the current workforce pays for the retires. That means it has always been running out of money and always will be unless the approach is changed. To date it has always been fixed to keep it solvent. It needs to be fixed so it always remains solvent, and that can be done.

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Tonster521

Community Champion ⭐

@john258I agree that the sources of revenue need to be increased rather than the "accross the board" reduction in SS Benefit payments which appears to be scheduled for 2034/2035. Most folks will automatically think increasing FICA tax rates is an easy solution. However, that solution places the burden on lower income folks. Although that may be a solution that Congress will implement, it appears to me to be another provision that has lower income folks subsidizing higher income folks. Perhaps FICA tax rates should be based on a progressive scale similar to Federal income tax brackets. In other words, at certain income thresholds, FICA tax rates increase for those folks. If you think this is out of the ordinary, you need to review the taxation of SS Benefits. If your income exceeds a certain threshold after you start receiving SS benefits (i.e, for Single with $25 K to $34 K up to 50% is federally taxable, for single with greater than $34 K up to 85% is federally taxable, etc.), you are repaying SS Benefits. Because it is part of one's Federal Tax return, some folks believe this money is kept by the U. S Treasury. It is not. The tax money collected by the 50% threshold is returned to the OASDI SS Trust. And the extra tax money collected by the additional 35% threshold in returned to the SS Medicare Trust. In other words, you receive SS Benefits; and, if you exceed certain income thresholds, you pay the SS Trust(s) back. This approach can be implemented while one is working just as easy after one starts receiving SS Benefits.

Next, I disagree with your statement that SS has always been running out of money. I am providing a link to SS Trust Fund Data that indicates the surplus years versus the deficit years https://www.ssa.gov/oact/STATS/table4a3.html The surplus was almost $3 Trillion. It is the surplus that is decreasing. If nothing is done to stop the decrease, the surplus is projected to be depleted by 2034/2035.

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ChaviB814890restAuthor

Community Manager

1 comment 👉(11/30/22) Awesome you stopped by @Tonster521, was hoping you would!!! Why? I have been reading your very helpful responses to the questions posted in this forum. Nicole

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MaryG229465

Contributor ⭐

If we consider that 75 million Babyboomers (like us) have been paying into Soc Sec for the last 80-odd years, I think its highly unlikely tht soc sec should be bankrupt any time soon. The problem is that soc sec is being given freely to illegal immigrants for hotel housing, free phones, and food. This is being kept quiet and so is the fact that some on disability have never worked and paid into the system but get monthly checks starting at before retirement age. Many people are genuinely hurt/sick and need the help, but we need for those who draw disability without being truly disabled to be kicked off the program. Each state should shoulder the responsibility for it's citizens.

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naxos

Contributor ⭐

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RobertH514774

Contributor ⭐⭐

There have been no media reports stating that it won't be around. However, there are many reports (including direct from SSA) that in or around 2034 that the current funding will only support ~70% of benefits if congress does not act.

https://blog.ssa.gov/social-security-funded-until-2034-and-about-three-quarters-funded-for-the-long-term-many-options-to-address-the-long-term-shortfall/

It is highly unlikely for congress to not fix this through various means and options. In politics SS benefits are considered the third rail - politicians who touch it get fried.

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TonyM975828

Contributor ⭐

Hopefully Congress will act to provide a solution, but given the political divisions, I'm concerned we'll face cuts in the coming years, but hope I'm wrong?

There was a proposed bill in the House, which in part repealed the WEP and offered modest reforms, but it never reached the floor for a vote, though it has bipartisan support.

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JorgeR482039

Contributor ⭐

I don't think is fair that a lot of us have been paying social security for the last 40 years, paying the benefits of those that are currently collecting, and when our time comes to enjoy the benefit of all those contributions, the government decides that we only get 77%.

If there is money to spend billions of dollars in a war that does not concern us, there should be plenty of money to fund the social security .

Hopefully they will come with a good idea before 2034.

SummerOnTheWay1

Community Champion ⭐⭐⭐

Jorge @JorgeR482039 , I am age 67 and agree!!! I told my only child, a daughter in her 30's NOT to plan for it being around when she retires. Seems to me, this issue is being "talked about" but NO ACTION to fix. Thanks for stopping by, Nicole!

➡️[*** JORGE

@JorgeR482039 wrote:
I don't think is fair that a lot of us have been paying social security for the last 40 years, paying the benefits of those that are currently collecting, and when our time comes to enjoy the benefit of all those contributions, the government decides that we only get 77%.
If there is money to spend billions of dollars in a war that does not concern us, there should be plenty of money to fund the social security .

Hopefully they will come with a good idea before 2034.

SereneSeagull

Community Champion ⭐⭐⭐

Been hearing that trope for years. It’ll still be around for her. Was meant to be a supplement, so any young person should be planning with that in mind and making good choices for future anyway

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