The Fate of Social Security
What is the question on the minds of so many American seniors? Will I outlive my Social Security? The short answer is, no. Social Security is considered a guaranteed benefit, so technically you cannot outlive it. But the better answer to that same question might be, maybe.
According to recent reports out of Washington the trust funds set up to keep Social Security afloat could run dry by the year 2037. The longer the country remains in a recession the harder it will be for the U.S. government to collect the money necessary to keep Social Security running at full capacity. And yes, as more baby boomers enter the Social Security system the drain on the trust fund will continue.
Even having said all that, it does not mean you will outlive your social security benefits. How the government, or if the government, decides to make up the money gap will determine the fate of the program. Luckily, those decisions are already being discussed in Washington. Taxes, increasing the starting age for Social Security payments, and other adjustments are all possible solutions.
In truth, if you are near retirement age then there is no need to worry about your payments running out. Yet many financial gurus suggest that you wait as long as possible before collecting. They say if you don’t need the money yet, don’t take it.
The first reason behind this train of thought is precautionary only. If you hope to be blowing out candles on your 100th birthday then you may want to hedge your bet a little. No one knows for sure what medical advancements could do to the longevity of Americans and in turn what that will do to the Social Security system. Also, the Social Security Administration puts an increase on your future payments for every month that you defer. This comes out to an additional 8% annually. So, the longer you hold off the larger your monthly benefits will be.
It goes without saying that the Social Security system is flawed. Yet, it has helped millions of Americans maintain a steady quality of life over several decades. Currently there is no need to panic about Social Security benefits. The program is still guaranteed with money in the coffers for several more years. At the same time it would be foolhardy not to do some solid financial planning, just in case.