SS Could Be Insolvent in 8 Years

[camfused]

https://www.marketwatch.com/story/s...ars-economist-warns-11629891784?mod=home-page

A new report from a Wharton economist predicts that Covid advanced the run out of money date to 2029.

The CBO has already taken a quess at 2032.

 

[RunningBum]

The SS trust fund annual report isn't even out yet. The economist is making projections without current data. In other words, a guess.

 

[aja8888]

The government never runs out of money these days. They just print more.

 

[ERD50]

Wait, I thought half of those over the age of 65 already died from COVID!!!! Aren't there fewer SS checks going out?

Seriously, this sounds like click-bait, no allowance for the reduced payment being made? Didn't I also read that average life expectancy in the US has gone down?

-ERD50

 

[aaronc879]

At that time it will still pay out something like 70%+ of current projections. Not like it goes down to zero. Not unless you are rich(super rich) and Congress passes a law that eliminates SS for rich people.

 

[Aerides]

A) this is marketwatch
B) this same headline has been recycled for 40+ years

 

[MichaelB]

B) this same headline has been recycled for 40+ years

And discussed here every time, with the same outcome every time.

 

[Exchme]

First, there is something like 74% coverage of benefits from incoming taxes, so we are not talking about it going away.

Second, about 15 years ago, there was an effort to make some changes to the funding of SS and there were very effective ads run showing politicians throwing grandma in her wheelchair off a cliff. There are 70,000,000 people that get old age, disability or survivor benefits, so those folks would be very motivated to vote to continue benefits. Politicians know the math and when the time comes, they will write the checks. So to me, this is not one of the bigger things to worry about. (You can of course worry about taxpayers ability to pay, but that's another discussion).

 

[disneysteve]

this same headline has been recycled for 40+ years

Exactly.


SS is not going away. Not in 2029. Not in 2032. Not ever. They will always find a way to fund it.


Might benefits for future retirees get trimmed somewhat? Sure, that might happen at some point.


Not something I would lose sleep over.

 

[Andre1969]

Last I heard, it was projected to run dry in 2035 and pay out about 80% of promised benefits. It was being painted as a gloom and doom story, but after hearing 2034 and 78% for what seemed like eons, I took it as a glimmer of hope!

 

[Sojourner]

SS is not going away. Not in 2029. Not in 2032. Not ever. They will always find a way to fund it.

Might benefits for future retirees get trimmed somewhat? Sure, that might happen at some point.

Not something I would lose sleep over.

+1

 

[USGrant1962]

Last I heard, it was projected to run dry in 2035 and pay out about 80% of promised benefits. It was being painted as a gloom and doom story, but after hearing 2034 and 78% for what seemed like eons, I took it as a glimmer of hope!

The last official forecast was the 2020 OASDI Trustees Report, through 2019. Trust fund depleted in 2034, income sufficient to pay 76% after that. And that was considering a booming economy and record low unemployment.

https://www.ssa.gov/OACT/TRSUM/tr20summary.pdf

The 2021 report, reflecting Covid-19, was due in April and I've read it is the latest it has ever been.

 

[ownyourfuture]

The government never runs out of money these days. They just print more.

Exactly.
What could possibly go wrong ?

 

[Time2]

Congress could do something right. Like, raise the tax rate, raise the retirement age, raise the cap, and reduce the cola.
Ha ha, just kidding, they won't do what's right, and especially not before it is a crisis.

 

[Badger]

And discussed here every time, with the same outcome every time.

+1
Not something I am going to worry about. Too many other things to think about like what flavor of ice cream I'm buying next.


Cheers!

 

[MRG]

And discussed here every time, with the same outcome every time.

Maybe put it out of it's misery? Nah this one's different for sure.

At least it's only 5.5 years to SS at age 70. I guess I will get less at 70 then if I filed today.

 

[Unpaintedhuffhines]

By definition it can't really run out of money unless they stop collecting taxes, right? I mean, the money that I have paid in isn't stored in an account, it was used to pay all those who were collecting SS while I was (am) working. Now it is possible that the money they take in won't cover the amount that they are required to pay out.

Too many old people who most certainly vote will put pressure on politicians to find a solution. I can see them taxing more of the benefit, but I can't see them taking it away, even for the "rich," mainly because of the difficulty of equitably measuring wealth. It's easy if I have all my $ in Fidelity or Schwab or whatever, but what if I have a rare painting, or a piece of jewelry or some other super complicated investments.

 

[finnski1]

Maybe put it out of it's misery? Nah this one's different for sure.

At least it's only 5.5 years to SS at age 70. I guess I will get less at 70 then if I filed today.

Yeah I just turned 62 a few months ago. If it's going to get a 30% haircut in 8 years maybe I should take it now. That way My break even would be something like a 110 years old.

 

[RetiredHappy]

Congress could do something right. Like, raise the tax rate, raise the retirement age, raise the cap, and reduce the cola.
Ha ha, just kidding, they won't do what's right, and especially not before it is a crisis.

But right by whose books?

Raise tax rate - people who pay tax don't like it.

Raise retirement age - people who are relying on SS to retire don't like it.

Raise the cap - I like it because I am not working, but ask those who work. But I think this is the least painful option. However, in the current formula, if you raise the cap, it means that the total cap will have to raise to pay out more to the high income earners who contributed to the system for the full 35 years. Unless there is no change to the total cap, then they don't get more SS back despite paying more into the system.

Reduce COLA - it is already a problem for retirees because COLA is insufficient to cover their health care cost increase.

So, for me, raise the cap should be the way to go. But I am just a little person behind the screen with a keyboard here.

 

[ejman]

Glad to see one of our perennials being debated again. I'm sure definitive answers will be forthcoming just like there are for our other favorite perennials - At what age should I take SS? Should I pay off my Mortgage?

 

[ShokWaveRider]

Yawn.

 

[daylatedollarshort]

Social Security was in crisis once before during the Reagan years. It was fixed by spreading the pain around between future and current SS recipients, including raising payroll taxes, raising the filing ages, and taxing current recipient benefits. This time around discussions include raising the filing ages again, fiddling with the inflation adjustments (basically not keeping up with real inflation), means testing, removing the earnings cap, and increasing benefits subject to taxes. This is a pretty good article on the subject - https://www.forbes.com/sites/stevep...etirement-planning--part-two/?sh=6c39d6fa3b1e

Congress will likely fix SS, but fixing it doesn't mean there won't be any reduction in benefits at all for current or future recipients. They will likely just spread the pain around again like last time and give the cuts stealth names like chained CPI to make them more palatable to voters.

 

[aja8888]

Gov is issuing a new postage stamp soon. It will be a "forever" stamp and will have an image of the treasury's money printing press on it. Count on it.

 

[Another Reader]

I would love the actuaries at Social Security and Medicare to step up and tell us their projections of how Covid and especially Long Covid are going to affect their income and outgo. Millions of fully and partially disabled people will leave or reduce their participation in the work force. And, being actuaries, you know these folks have made some detailed estimates of the impact.

 

[Birdie Num Nums]

Social Security was in crisis once before during the Reagan years. It was fixed by spreading the pain around between future and current SS recipients, including raising payroll taxes, raising the filing ages, and taxing current recipient benefits....

They (Reagan govt) also made federal contractors (and federal employees too?) pay into SS. Before then, you didn't have to. I know, because I worked for a federal contractor, starting in 1981. I didn't have to pay SS taxes. Starting in 1983 or thereabouts I did, although under the then-current new SS law we could "grandfather out" and continue to not pay SS taxes. I'm glad I decided to not opt out. I'll be getting some nice change $ when I start collecting SS benefits in a couple of years.