Can You Count on Social Security?

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It’s trendy in some circles to discount Social Security completely. But when you look at the facts for those nearing retirement now, that just isn’t realistic. Social Security will be a key part of retirement for most of us.

Social Security is in genuine trouble: According to a recent Social Security Statement of mine, “the Social Security system is facing serious financial problems, and action is needed soon to make sure the system will be sound…” My 2010 statement went on to say that “In 2016 we will begin paying more in benefits than we collect in taxes. Without changes, by 2037 the Social Security Trust Fund will be exhausted and there will be enough money to pay only about 76 cents for each dollar of scheduled benefits.”

Despite the dire predictions and financial realities, it is highly likely that Social Security will survive in something like its current form. Why? For one thing, note carefully that it is good for another 25 years even if the politicians do nothing. Also, realize the changes needed to fix it, though politically unpalatable, are relatively modest.

Theodore Roszak, in his book Longevity Revolution: As Boomers Become Elders, projects that if the payroll tax were increased just 1 percent each for employees and employers, it would be enough to keep Social Security solvent through the rest of the century. That’s a rather small, simple price tag, compared to the drastic changes needed to address other such issues, like Medicare.

Finally, given the boomer generation’s experience of two stock market busts in just the last decade, it is almost inconceivable that a majority would support removing the guarantees associated with Social Security and turning the program over to the Wall Street wizards who brought us the Great Recession. Boomers will be a formidable voting block in their later years, and would surely overrule any attempts to radically change or gut Social Security.

So it’s as foolish to ignore Social Security’s potential contribution to your retirement as it would be to rely solely on Social Security’s limited payments for your well-being….

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