Do You Care About Social Security?

Do you care whether Social Security will be available when it’s your time to retire?

I’ve written on this topic quite a bit on other financially-related sites and alluded to it in some of the stock market quarterly updates we post here on Savings Beagle.

The reality is, America’s Social Security program is underfunded and will not be able to continue paying recipients full benefit checks in the future.

This isn’t a scare tactic, this is just fact.

Under current law, just 79% of scheduled benefits are projected to be payable to recipients in 2034.

Or, put another way, without legislative action to shore up the Social Security program, those getting a Social Security check in 2034 and beyond will see 21% less than in previous years.

And that’s being optimistic.  The projected time periods for reduction of benefits have a way of inching closer as funding calculations change.

So what used to be “sometime in the future,” is turning out to be a lot closer than you imagine.

What got me thinking about Social Security?  Well, to be honest, I’m always thinking about the Social Security funding shortfall, as well as the underfunding of Medicare and Medicaid since those are the largest expenditures in the federal government’s budget.

But, it was a well-put-together piece on Social Security that I read just today which got my financially responsible fires burning.  And I thought the message and article needed to be passed along to Savings Beagle readers.

Simon Black, the author of the piece titled, “Social Security Proposes “Immediate and Permanent Reduction” in Benefits,” starts his article off in a unique way, discussing the discovery of a supernova.  At first, I wondered where he was going, but he was able to pull it all together nicely in the end.  I encourage you to give his full article a read at the link above.

Here’s a teaser to whet your appetite:

The Social Security Administration itself reports that 62% of recipients rely on the program for at least HALF of their income.

And further research by the Center on Budget and Policy Priorities (CBPP) shows that, without Social Security, 22.1 million Americans would fall below the poverty line.

Needless to say, major cuts to the program would have nuclear effects.

And yet, year after year, the Social Security Board of Trustees publishes an annual report that describes the program’s terminal financial challenges in excruciating detail.

They mince no words in plainly stating that Social Security pays out far too much money, and takes in far too little.

According to the 2017 Trustees report, “Trust Fund reserves become depleted in 2035.”

He’s right on point with what he writes. Unfortunately, too few listen when he, I, and others sound the warning.  And that includes our elected officials at the federal level.

So, what to do?  Well, you could try writing your U.S. Representative and Senators and tell them to fix Social Security – and the Medicare and Medicaid programs, too – so that benefits will be available, in full, in the years to come.

Aside from that, your best bet is to save as much of your own money as you can.  Which is exactly why we founded and continue to run Savings Beagle.

At the end of Mr. Black’s article, he offers strategies, aside from just saving more, to shore up your own finances in anticipation of what’s likely to come.  I won’t comment, one way or another, on those strategies, you can decide for yourself whether or not they’re something to consider.

But, without question, I wouldn’t count too much on our elected officials doing what really needs to be done to better Social Security’s outlook…it’s simply not politically palatable.

And, to be honest, many of you reading this wouldn’t like the results of a true fix, either.  Which is the main reason politicians won’t act on this very important matter.

So, it’s up to you.  Save as much as you can and don’t rely on government programs to be available in their current form when it comes time to use them.

The year 2034 might seem like a long way off.  In reality, it’ll be here before you know it.  And so will the negative consequences of our elected leaders doing nothing to shore up the fiscally unstable Social Security, Medicaid, and Medicare programs.

image courtesy of 401kcalculator.org