Will we have them or won’t we have them? That is the age-old question when it comes to Social Security benefits.
If you’re over 65 years old or planning on living to be 65 years old, odds are you’re relying on Social Security as a source of income to supplement your retirement savings or you’re straight up depending on it to live.
However, we’re facing the largest senior population the US has ever seen thanks to the Baby Boom – and Social Security is at serious risk for going bankrupt well before Gen X’ers, Xennials, Millenials and Gen Z’ers need it.
But why?
Social Security is funded by a 12.4% payroll tax that we all pay into, however, we’re facing a surplus of retirees now that the baby boomers have officially aged into retirement.
In fact, by 2030 every Boomer will be over the age of 65, which means the number of people receiving Social Security benefits will exceed the number of people working jobs and paying into the program.
But let’s back up for a minute. What’s our status right now?
Well, we’re currently working with a surplus of Social Security money that had previously been set aside in a trust fund that was able to close the income gap between the program’s earning and spending. However, this year that gap is going to widen and the program won’t be able to make up for lost income.
The super surge of seniors means that by 2034, the trust fund will be entirely wiped out and while this won’t necessarily bankrupt Social Security it will cause the program to make 25% cuts to all recipients’ benefits.
Eek. So, can anything be done?
Well, we’ve been here before. In 1982, Congress stepped in and made changes to alleviate Social Security’s financial woes by increasing payroll taxes, raising the retirement age, and implementing federal income taxes on certain qualifying retiree income.
Will the current Congress step in before it’s too late? While similar changes have been floated on the floor, a bill has yet to be drafted. For shame.
So, will we or won’t we? We don’t know.
However, the times, they are a’changing and if Congress can pass legislation for universal healthcare and tuition reimbursement, then maybe we won’t need it. Of course, that doesn’t make up for the years of low-to-no earnings Millenials faced during the recession, but it might be what can save us from needing to rely solely on Social Security benefits.
Meg Furey-Marquess is a Staff Writer at The American Genius. She has covered tech for The Metro Silicon Valley and The Bold Italic. She was named one of the Top 39 Writers on Medium in 2016.
