Social Insecurity - By Peter Geckeler

Jennifer Hester |


“Will Social Security be around when I retire?”

This is one of the most common questions we get when discussing retirement funding with clients. Couples young and old are all concerned about the future of Social Security – and for good reason. The amount Social Security is currently paying out to retirees exceeds the amount being funded through payroll taxes. Social Security is able to sustain payments because of the money held in trust through the Old Age and Survivors Insurance and Disability Insurance. However, by the mid-2030s that amount held in trust will be drained, and Social Security will only be able to pay out benefits that it takes from paychecks of working Americans. The results are that either SS benefits will suddenly be reduced by close to a quarter, or payroll tax rates will need an increase to 18%.

While this news is concerning, there are a number of strategies that can be employed to make up the needed funds including raising payroll taxes, income means-testing to restrict who receives Social Security, and pushing off the age that individuals can collect their benefits. These strategies would only alleviate the Social Security pressure temporarily, and would also have their own independent impacts on individuals moving forward. Give us a call so we can help you clarify your retirement picture with these Social Security realities in mind.