Will There be Money Left in Social Security When I Retire?
During this economy, not only are people fearful of layoffs and cutbacks, but they are also concerned about the likelihood of there being money left in Social Security when they retire.
Because there are so many people unemployed, the rate at which the Social Security surplus was expected to disappear has done so at a much faster rate. For the past 26 years, Social Security has had a surplus, which is the excess funds used to pay for other programs, but that surplus vanished this year, 10 years ahead of schedule. This, by no means, is good news. But it does not necessarily mean that there won’t be any money left in Social Security when working-age individuals retire.
The Bad News
For the first time ever this year, Social Security paid out more in benefits than the system collected in taxes and interest combined. This means, there are more aging people that are retiring and collecting Social Security benefits, than there are younger workers paying payroll taxes that go toward the Social Security system.
According to the Heritage Foundation, Social Security is expected to run another deficit for the second year in a row, in 2010. The foundation says that the system could briefly return to surpluses if there is a strong economic recovery, but by 2016, the deficits will return and continue permanently.
The Good News
Many experts believe that it would be very difficult to severely reduce or eliminate Social Security for current workers that have several years to retire, and they shouldn’t worry a great deal about if there will be any money left in Social Security when they retire.
There will definitely be some reform to the system, which may include raising the retirement age or raising payroll taxes so more money goes toward Social Security. Workers may not be too excited about that, but it will help solve the deficit problem and ensure that there will be money left in Social Security when working-age individuals retire.
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- How is My Social Security Eligibility Determined?
- How Does My Work Now Equal Social Security Benefits Later?
- How Much Social Security Will I Get?
- What Are Barack Obama’s Views On Social Security?
- How Can I Get The Most Social Security?
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