{"id":450,"date":"2019-08-01T19:57:48","date_gmt":"2019-08-01T19:57:48","guid":{"rendered":"https:\/\/diymakerhub.com\/?p=450"},"modified":"2024-05-31T21:28:20","modified_gmt":"2024-05-31T21:28:20","slug":"the-future-of-social-security","status":"publish","type":"post","link":"https:\/\/diymakerhub.com\/index.php\/2019\/08\/01\/the-future-of-social-security\/","title":{"rendered":"The Future of Social Security?"},"content":{"rendered":"

By Dr. Steven Weisbart, Chief Economist, Insurance Information Institute<\/em><\/p>\n

\"\"<\/a>Beginning in 2020, the Social Security fund for retirees will be paying out more than it is taking in. This means that if there are no significant changes, in about 2034 the fund will exhaust the surplus it had built up since 1983. In that case, income to Social Security (from FICA taxes) will only be able to fund about 75 percent of benefits payable. It is for this reason that surveys show that many people under age 50 believe that Social Security won\u2019t be available to provide retirement income for them.<\/p>\n

Since Social Security income will be an important part of virtually everyone\u2019s retirement, and since 2035 isn\u2019t very far off (in financial planning terms), we should all be mindful of what might happen, and what we can do now to cope with adverse scenarios.<\/p>\n

The government currently has no plan for what to do when the money runs short. One possibility is that everyone\u2019s check in 2035 will be for 75 percent of what it was in 2034. Another possibility is that all those who received checks in 2034 will get the same amount in 2035 and new recipients will have benefits trimmed to fit the remaining funds. A third possibility is that those who are entitled to the highest dollar benefits will get nothing (on the presumption that they had high incomes and so likely have other sources of retirement income) so that those with smaller benefits can be paid their whole entitlement. And other possibilities exist, too.<\/p>\n

It\u2019s also possible that Congress will act to change the program so that none of these possibilities take place. Indeed, earlier this year H.R. 860 (The Social Security 2100 Act) was introduced in the U. S. House of Representatives to do just that. The House Ways & Means Committee held a hearing on this bill on July 25, 2019. As of July 30, the bill had 211 co-sponsors\u2014nearly enough for the full House to pass the bill and send it on to the Senate.<\/p>\n

There are essentially seven major provisions in H.R. 860. Two of them raise payroll taxes to help fund Social Security benefits. Oddly, other provisions raise<\/em> Social Security benefits. The two that raise payroll taxes are:<\/p>\n