HOW SECURE IS SOCIAL SECURITY? Will Social Security be around when I retire?

By | March 2, 2016

With the word “security” in the title, you would hope that it is pretty secure.Social Security benefits  Many people are asking, “Will Social Security be around when I retire?” And, “If Social Security runs out before I retire, what am I going to do?” — If you’ve asked those questions, you are not alone.

Social Security’s future as been a hot topic over the past couple years.  Taking a look at the origins of Social Security may give us some clues to help predict the future.

HISTORY 101: Social Security

FDR signing Social Security Act

FDR signing Social Security Act

On August 14, 1935, then President Franklin Roosevelt signed The Social Security Act into law.  It looked a lot different back then, but then you could say that about a lot of things – our cars, our clothing, our military, or our labor force.  As you may or may not know, the original intention for the Act in the first place was to pay benefits only to the primary worker in each family.

Social insurance, as conceived by President Roosevelt, would address the permanent problem of economic security for the elderly by creating a work-related, contributory system in which workers would provide for their own future economic security through taxes paid while employed.  As makes sense, this is when Social Security Numbers were established because it was necessary to track and “register” the workers eligible for this system.  While originally intended for the retired individual only, the Act was soon amended to include spouses and dependent children.

According to the Social Security Administration website, in 1937, there were 53,236 beneficiaries to the program, and payments made equaled $1,278,000.  Graph from Government Accounting OfficeIn 2008, there were 7,520,501 beneficiaries to the program, and payments made equaled $43,040,000,000.  That number is staggering, and with the number of retirees growing every year, and life expectancies increasing, the fear of extinction of this program does weigh heavy on many, especially those who have not prepared for retirement with other sources of income.

One source I found indicated that in July of 2015, the Social Security Administration’s annual report revealed that the trust that funds Social Security benefits will likely be unable to pay scheduled benefits by the year 2034, the year in which today’s 48-year-olds reach full retirement age.  But there are other sources who sway on both sides, including more optimistic.

Wake Up Millennials!

If you are turning 36 years old on your next birthday – you are a millennial.  You should be preparing for your retirement now.  You may not want to count on Social Security.  How will that reality change the way you live today so that you can live the way you want in retirement?

Social Security Reform?How to Fix Social Security

In this crazy election year, you’ll hear several of the presidential candidates with their own ideas about how to fix Social Security.  One would like to increase the age of eligibility.  Most agree that those at or nearing retirement age should not be penalized.  What about phasing out these social security retirement benefits for Americans in higher income categories?  Economists and politicians will continue to wrestle with this.

Social Security:  A benefit

Lest we not forget, these Social Security payments are “benefits”.   We should consider the payments as something “extra.”  Sadly many people in our society, both retired and not retired, look at Social Security as their “only” retirement income.  Social Security benefits are meant to “supplement” your other retirement income and bring “benefit” to your retirement years.

Planning to Retire?

Whether you are nearing retirement age or just graduating college, make sure your retirement is secure.   Social Security may be alive and well for years to come, but those benefits should not be your only source of income.  To help supplement your retirement nest egg, there are many great ways to earn some extra cash.

In today’s society, the internet affords many opportunities to market and earn income.  You can do this at any age, and many times from home in the small pockets of free time you have.  One great resource to check out is Wealthy Affiliate.

Remember, the best hands in which to place your future are your own.

Please share your own questions, ideas, and reflections in the comments below.  I look forward to hearing from you.

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10 thoughts on “HOW SECURE IS SOCIAL SECURITY? Will Social Security be around when I retire?

  1. Fearless Squirrel

    I’m really curious to see what happens in the future with this. I also just recently realized how much less my SS payouts will probably be if I FIRE when I plan to. I never fully considered impact on the estimated amounts they give you on the website since they are based on you continuing to work until normal retirement age. SS is an interesting beast that I have no intention of including in my planning. If it shows up that’s a bonus, but like you said it’s best to put your financial future in your own hands and treat it like the benefit it really is.

    Reply
  2. Ashley Chorpenning

    Great article! It’s so important to take care of your own finances and not rely on any program. You never know what the future holds. Start now! Plan today! Thank you for sharing this information.

    Reply
  3. Megan

    We have a similar issue in Australia at present – an aging population and a crippling Social Security bill. Everyone of working age has a Superannuation account where compulsory contributions are made for your retirement but many are finding when they get there that there is nowhere near enough to live on. They are then still dipping into Social Security as well. People need to make arrangements as early as possible to fund their retirement. I know I only have 20 years until retirement age and I’m working on a number of strategies to support myself at that time. Thank you for your informative post about this issue.

    Reply
    1. David Hagstrom

      Thank you!, Megan!  If you’d like some ideas on how to make that work, get in touch by email or phone (see About) and we’ll be happy to help.

  4. Henry

    Greetings David,

    You have realistic & practical approach to social security topic which is very important in my eyes.
    I personally am long way from retirement as I have many years to go, but I’m convinced that it never hurts to be much more prepared.
    Certain guidelines are set in stone, but really, are they? Indeed, reforms can knock on our doors soon.. if not tomorrow then the next year or perhaps couple of years after that.

    It’s much better if we already know it & expect it coming meanwhile we do our best to improve our situation regardless. Who knows what tomorrow brings, so alternative sources to improve our quality of life are always welcome.

    Thank you for your time & effort!
    I also believe Wealthy Affiliate is excellent place to make our lives much easier once we’re retired & even before that. It’s for everyone regardless of your direction.
    I’m also a bit curious: How long have you been with Wealthy Affiliate yourself? ..and most of all: What was your first impression while joining this wonderful community?

    Regards,

    Reply
    1. David Hagstrom

      Thank you, Henry. As you noted, our approach is not to make predictions so much as to note possibilities and how to prepare ourselves.

      As to your question: I’ve been with Wealthy Affiliate for 8 months now. My first impression was, “This is the supportive community I’ve been searching for.” I’d found good training elsewhere, but WA adds the crucial component of answering your questions quickly when you need it. Over time, my appreciation for Wealthy Affiliate has only grown!

  5. Anh Nguyen

    Well, in Vietnam, there is no social securities (only for specific groups of people) so I learnt quite a bit of new things from this article.

    While it’s great you are more secured with provision from the government, as you said, it’s not something you should totally rely on when the population is growing, where the working class may not be able to provide for all the retirees.

    Personally, I think it’s better to have your own income streams or savings. The idea of relying on others to provide it for you (despite the fact that you did pay tax before) is kind of risky.

    Thanks for sharing!

    Reply
    1. David Hagstrom

      Thank you for providing perspective from another country, language, and culture. It is much better to plan and prepare, than to rely on the government providing for you. There are many ways to help provide for your later years; for example, here are some great ways to make money online.

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