No, your Social Security isn’t going away
The Social Security Administration (SSA) is making a concerted effort to quell fears over dwindling reserves in the trust fund.
In a new episode of the SSA Talks podcast, SSA chief actuary Steve Goss offered some much-welcomed reassurance that, while there is still a risk that benefits will lessen as the reserves are depleted, there’s no need to believe Social Security will run dry.
“People should not worry about the trust fund ‘running out of money,’ as is sometimes said, and (SSA) having an inability to pay any benefits,” he said.
“Sort of the probably worst-case scenario here is that we, within 10 years, reach a point where we can only pay about 80% of the level of benefits that are scheduled or intended into law by Congress as of that point in time and going forward.”
Goss concedes that while that number is obviously not 100%, “it’s a long way from not having any money to pay for any benefits.”
His commentary follows the SSA’s announced cost-of-living adjustment last month that increased benefits for recipients by 3.2% — or on average about $54 per month — starting in January.
Many Americans fear that the program faces financing shortfalls, however. A recent Harris Poll of 1,806 adults on behalf of Nationwide shows that three-fourths (75%) of those over the age of 50 worry that Social Security will run out of funding in their lifetime. One in five of these adults (21%) said they have no other source of retirement income.
Congress is stalemated
Congress has not been much help on the reassurance front, either. While there are usually numerous bills circulating on various aspects of Social Security, the fate of benefits seems to lie stagnant between congressional Republicans and Democrats.
Though both parties have denied that cuts to benefits are on the table, they have yet to offer any clear, bi-partisan reassurance that there is a path forward to prevent a crisis for future retirees.
Lawmakers’ proposals on potential remedies to the program include increasing payroll taxes, raising the retirement age (last raised from 65 to 67 in 1983), and increasing taxation on Social Security benefits.
Among the bills fairly recently introduced is one from Rep. John Larson (D-CT), ranking member of the House Social Security Subcommittee. Introduced in May, Larson’s Social Security 2100 bill seeks to increase Social Security payroll taxes, as well as add an additional net investment income tax for people earning more than $400,000.
The bill, which has companion legislation in the Senate, has received widespread support from Democrats but has been met with criticism by Republicans. Like most bills this session of Congress, it is unlikely to move out of committee.
What you can do
As for taking action yourself, there are steps you can take, including delaying applying for Social Security so that you increase your payments. [Ed. Note: The closer you get to the age of 70 to claim benefits, the more you will earn per month for the rest of your life.]
You can also write to your Congressional representatives to urge action.
For help in planning for retirement and figuring out your personal retirement Social Security payments, Goss recommends visiting the SSA’s website, ssa.gov.
© 2023 The Kiplinger Washington Editors, Inc. Distributed by Tribune Content Agency, LLC.