The 84th anniversary of the creation of Social Security is this week. The question is will it be around for another 84 years?
According to the National Academy of Social Insurance, an estimated 61 million Americans collect Social Security benefits each month. That’s about one in five people in the U.S.
With some many people in need of its benefits, it’s easy to see why experts and individuals are worried that the well will run dry – and soon.
For the first time since 1982, the Social Security Administration’s total cost is projected to exceed its total income next year.
Supply & Demand
An estimated 10,000 baby boomers become eligible for Social Security benefits each day. As boomers become eligible and reach retirement, the importance of having adequate retirement income will be paramount. According to an April report from SSA, the funds reserved for Social Security will be depleted by 2035, if no action is taken by Congress.
The dire situation Social Security finds itself in will undoubtedly become a hot topic in the 2020 elections as candidates release budget proposals for spending on programs such as Social Security and Medicare.
Brian Doherty is a Social Security expert and president of Filtech, a company specializing in Social Security claiming strategies. Doherty understands the importance of Social Security, calling it “the greatest anti-poverty program in the history of this country, maybe in the history of the world.”
So it may surprise some to hear that Doherty isn’t all that worried about Social Security’s future.
“There are some long-term funding issues, but they’re not as insurmountable as people think,” Doherty said. “In fact, the math to fix it is fairly easy.”
Doherty is optimistic, even in the event of a worst-case scenario outcome for Social Security.
“The worst-case scenario is Congress does nothing,” he said. “In that case, by the year 2035, SSA will have to reduce everybody’s benefits by about 22%. Once they do that, Social Security is on sound financial footing to meet all its benefit obligations through 2093.”
While this worst case scenario is possible and would possibly cause further harm to beneficiaries through steep benefit cuts, Doherty believes it’s more likely that Congress will fully funding Social Security “one way or another.”
AdvisorNews Managing Editor Cassie Miller may be reached at cassie.miller@Adnewsfeedback.com. Cassie has an extensive background in magazine writing, editing and design. Follow her on Twitter @ANCassieM.