These Social Security Facts Might Surprise You
Way back in 1935, Social Security was created to provide supplemental income to retirees. We all pay into the system via payroll taxes, so naturally we expect our benefits to be available in the future when we will need them.
Hopefully that will be the case. However, the future of Social Security is facing a bit of trouble, and lawmakers are scrambling to remedy the problems. Looking toward the future, and your retirement years, keep these facts in mind.
The Social Security Trust Funds are running out of money. While most benefits are paid out of incoming taxes each year, Social Security does maintain two trust funds that help to provide necessary funding. Those trust funds are set to run out of money by about 2034.
The program is facing a deficit now. Since 2010, Social Security has paid more in benefits than they have received in taxes. Each year the Treasury Department faces a budget shortfall.
In 2034, Social Security will be able to pay only 79 percent of expected benefits. That’s if we do nothing at all regarding the budget problem.
Social Security comprises about one-third of all income for retirees. Adding together all income reported by current retirees, Social Security benefits account for 34 percent.
The retiree population is growing rapidly. As of January 2017, 48 million members of our society have reached age 65. By 2035, that number will grow to 79 million.
The birth rate has slowed. People are having fewer babies these days, which means we will have fewer young adults going to work (and paying taxes) by 2035 or so.
Therefore, the number of taxpayers is dropping. Currently, we have 2.8 taxpayers supporting each person on Social Security. By 2035, that number will drop to 2.1 taxpayers per beneficiary.
It’s not difficult to see that we’ve gotten ourselves into a bit of a pickle. That’s why lawmakers continually debate the best ways to fix the budget shortfall, so that your Social Security benefits will hopefully be available when you need them.
But of course, Social Security was never meant to serve as a primary source of income for retirees. Give us a call so that we can help you continue to plan for a stable retirement income.