Social Security and You: Social Security Will NOT Go Broke!
we go again. Another round of scare stories about the impending doom of Social Security. Headlines, such as this one in my local newspaper -- " Social Security Moves Closer to Bankruptcy " -- have many of my readers on edge.
These kinds of headlines were prompted by a report released last week from the Social Security Board of Trustees that said the nation's bedrock social insurance program is one year closer to insolvency. It said that if no changes are made to the program by 2034, the system would be unable to pay full benefits. That's one year earlier than the 2035 date in last year's report.
My emails clearly indicate that news has many of my readers saying, "Oh my God, what do we do now?" But frankly, it's got me saying, "Ho-hum. Been there, done that!" Without trying to be too flippant, let me explain.
My hunch is that most senior citizens reading this column have been paying attention to Social Security issues for the last 10 years -- maybe 20 at the most. But I've been paying attention to Social Security for the last 50 years. And I'm also a pretty good student of its entire 80-year history. And I can't even begin to count how many headlines I've seen over the years that predicted Social Security's bankruptcy. And of course, not a single one of them has ever come true. And these latest headlines won't come true either.
Why? Just go back to the trustee's report. You'll note it says the system faces insolvency "if no changes are made to the program by 2034." And here is the deal. Congress will implement Social Security reforms long before we get to 2034. Anyone who knows Social Security history knows we've been down this road many times before. The last time was in 1983, when the system was just five years away from insolvency. Then-President Ronald Reagan formed the National Commission on Social Security Reform and Congress implemented many of their proposals (like increasing the full retirement age).
So, sometime in the not-too-distant future, we'll likely see another such Social Security reform commission. And how will they change Social Security? Listed below are eight commonly mentioned reforms. Four involve cutting benefits and four deal with raising revenues. Next to each is a number expressed as a percentage. The number indicates the portion of Social Security's long-range deficit that would be eliminated if the proposal became law. Also listed is a brief argument for and against each proposal.
So, why not see if you can "save Social Security"? If you can find solutions totaling 100% or more, you've kept the system solvent for future generations!
PROPOSALS THAT WOULD REDUCE BENEFITS
No. 1: Raise the retirement age to 70 by 2060 -- a 68% fix.
Q: Why is this a good idea? A: People are living longer, healthier lives and with enough lead time, they would be able to plan for the delay in receipt of their benefits.