{"id":5652,"date":"2019-04-05T16:30:09","date_gmt":"2019-04-05T21:30:09","guid":{"rendered":"http:\/\/billlosey.com\/?p=5652"},"modified":"2019-04-05T16:30:09","modified_gmt":"2019-04-05T21:30:09","slug":"could-social-security-really-go-away-2","status":"publish","type":"post","link":"https:\/\/billlosey.com\/knowledge-center\/could-social-security-really-go-away-2\/","title":{"rendered":"Could Social Security Really Go Away?"},"content":{"rendered":"\n

That may be unlikely, but the program does face definite financial challenges<\/em><\/p>\n\n\n\n

Will Social Security run out of money in the 2030s?<\/strong> You may have heard warnings about this dire scenario coming true. These warnings, however, assume that no action will be taken to address Social Security\u2019s financial challenges between now and then. <\/p>\n\n\n\n

It is true that Social Security is being strained by a gradual demographic shift.<\/strong> The Census Bureau says that in 2035, America will have more senior citizens than children for the first time. In that year, 21% of us will be age 65 or older. <\/p>\n\n\n\n

As this shift occurs, the\nratio of workers to retirees is also changing. There were three working adults\nfor every Social Security recipient in 1995. The ratio is projected to be 2.2\nto 1 in 2035.<\/p>\n\n\n\n

Since Social Security is\nlargely funded with payroll taxes, this presents a major dilemma.<\/p>\n\n\n\n

Social Security may soon\npay out more money than it takes in. <\/strong>That\nhas not happened since 1982. This could become a \u201cnew normal\u201d given the\nabove-mentioned population and labor force changes.<\/p>\n\n\n\n

When you read a sentence\nstating, \u201cSocial Security could run out of money by 2035,\u201d it is really\nreferring to the potential depletion of the Social Security Administration\u2019s\nOld Age, Survivors, and Disability Insurance (OASDI) trust funds \u2013 the twin\ntrust funds from which monthly retiree and disability payments are disbursed.\nShould Social Security\u2019s net cash outflow continue unchecked, these trust funds\nmay actually be exhausted around that time.<\/p>\n\n\n\n

Social Security is currently authorized\nto pay full benefits to retirees through the mid-2030s. If its shortfall\ncontinues, it will have to ask Congress for greater spending authority in order\nto sustain benefit payments to meet retiree expectations.<\/p>\n\n\n\n

What if Congress fails to\naddress Social Security\u2019s cash flow problem? <\/strong>If no action is taken,Social Security could elect to reduce\nretirement benefits at some point in the future. Its board of trustees notes\none option in its latest annual report: benefits could be cut by 21%. That could help payouts continue steadily through\n2092.<\/p>\n\n\n\n

No one wants to see\nbenefits cut, so what might Congress do to address the crisis?<\/strong> A few ideas have emerged.<\/p>\n\n\n\n

*Expose all wages to the\nSocial Security tax or increase it at certain levels.<\/strong> Right now, the Social Security tax only applies to\nincome above $132,900. Lifting this wage cap on the tax or boosting the tax\nabove a particular income threshold would bring Social Security more revenue,\nspecifically from higher-earning Americans.<\/p>\n\n\n\n

*Raise Social Security\u2019s\nfull retirement age (FRA).<\/strong> This is\nthe age when people become eligible to receive unreduced retirement benefits.\nThe Social Security reforms passed in 1983 have gradually increased the FRA\nfrom 65 to 67. Should it be reset to 69 or 70? Healthier, wealthier seniors\nmight tolerate such a decision, but poorer and less-healthy ones might not.<\/p>\n\n\n\n

*Calculate COLAs\ndifferently.<\/strong> Social Security could\nfigure its cost-of-living adjustments (COLAs) using the \u201cchained\u201d version of\nthe Consumer Price Index, which some economists believe more accurately\nmeasures inflation than the standard CPI. Its COLAs could be smaller as a\nresult.<\/p>\n\n\n\n

*Stop paying Social Security<\/strong> benefits to the richest retirees.<\/strong> This would help to address a cash flow imbalance.<\/p>\n\n\n\n

Social Security could be restructured in the coming decades.<\/strong> Significant reforms may or may not fix its revenue problem. In the future, Social Security might not be able to offer retirees exactly what it does now, and with that in mind, you might want to reevaluate your potential sources of retirement income today. <\/p>\n","protected":false},"excerpt":{"rendered":"

That may be unlikely, but the program does face definite financial challenges Will Social Security run out of money in the 2030s? You may have heard warnings about this dire scenario coming true. These warnings, however, assume that no action […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[18],"tags":[],"class_list":["post-5652","post","type-post","status-publish","format-standard","hentry","category-blog"],"_links":{"self":[{"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/posts\/5652","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/comments?post=5652"}],"version-history":[{"count":0,"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/posts\/5652\/revisions"}],"wp:attachment":[{"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/media?parent=5652"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/categories?post=5652"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/tags?post=5652"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}