We just got the annual report on the state of Social Security. There’s a tiny bit of good news in there, but it’s mostly a whole lotta ugly. 😣 Kinda like how that string quartet was playing such lovely music while the Titanic sank…
Here are Five Fast Facts on the current condition of Social Security:
- 💸 The Projection - Once again, Social Security paid out more than it took in last year. To the tune of $2.8 trillion dollars more. That’s simply not sustainable, even for an economy as big as the US. The program will run short in the next decade, and then only 83% of today’s benefits will be paid out. Last year it was 80%, so there’s your silver lining - the Titanic is now sinking slightly slower!
- 🪓 The First Cut - If the program isn’t revised before it runs out of money, then the benefits paid out will be limited to only the amount that comes in each year. That means Social Security checks will be cut by about 21%, which is about $4,600 less each year for the average recipient. It’s no wonder no politician wants to propose that!
- 🤯 The Magnitude Of It - The problem is MASSIVE. It’s $22 trillion short of its obligations over the next 75 years. That’s equal to $172,000 in taxes per household! The original promise was that it would never go over 6% of workers’ paychecks; it is currently at 12.4%. That’s government math for you.
- 📈 The Fix - The immediate concern of running into shortages in the next few years can be “fixed” by raising Social Security taxes from 12.4% to 17.5%. That works out to about $2,500-$3,800 more in taxes each year for a household making $75k. That’ll be great on top of inflation, won’t it?
- ⚖️ About That Fair Share - One of the misconceptions about this is that the problem is not everyone paying “their fair share.” Reality check: if the government took possession of all money, cars, houses, businesses, EVERYTHING owned by all billionaires, and slapped a 100% tax rate on all millionaires, it would only fund the government for…(wait for it)...nine months. So yeah, not really a solution.
🔥Bottom line: Why is this happening? Well, it’s been allowed mostly by mismanagement from Congress and the White House for decades, not to mention general apathy from the voting public not holding them accountable. But the primary driver is that we’ve got more people taking money out of the system now than ever before, and that means fewer workers paying into it than ever before. That math is actually not hard, especially with Baby Boomers retiring by the thousands every day now! It’s no wonder that 90% of Americans age 50+ are concerned they won’t get the benefits they’re expecting. They see the Titanic going down and are counting seats on the lifeboats.
What do you think should be done about Social Security?
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