Writer: Steve Dinnen
We all know that Social Security is going broke. Now we all know it’s going to happen sooner rather than later – 2033 instead of 2034, according to a new report from the folks at the Social Security Administration. Well, actually, Social Security itself is not going away. It’s just that by then the Old Age and Survivors Insurance Trust Fund that comprises a huge portion of the payout to 60 million Americans will be tapped out.
What then? Payments will continue, but at a reduced rate – say, 76%. That is the amount that Social Security figures it can handle by paying out benefits to retirees from money it is collecting from active worker paychecks.
The average Social Security check is $1,437 – hopefully pin money to astute readers of dsmWealth. Sadly, though, half of current retirees depend on these checks for half of their income.
Is a fix on the way? Hardly. Years ago some lip service was given by Washington lawmakers to shoring up the program. Then other hot-button issues like immigration reform (also not done) distracted them. So instead, workers are encouraged to bolster their private retirement savings plans – IRAs, 401(k)s. Very useful ideas, to be sure. And it conveniently lets Congress off the hook.
