Social Security has been one of the most essential services provided by the federal government since the Social Security Act was signed into law by President Franklin Delano Roosevelt in 1935. Some 66 million people receive benefits from the Social Security Administration, and approximately 62 percent of older beneficiaries receive at least half of their income from social security.
However, despite its importance, Social Security could be in trouble. With an aging population and more and more people retiring, the financial security of the program is far from certain. As millions of people plan for their retirement, they need to know if the program’s future is secure enough for them to rely on or if they have to prepare for an eventuality where it’s no longer there, but the current state of affairs might not be providing the answers they want.
Here are five unsettling things you need to know about Social Security’s future:
- Social Security Trust Funds Might Run Dry by 2034 — The Old-Age and Survivors Insurance Trust Fund has it covered until 2034, but after that things are uncertain.
- Boomers Are Retiring in Droves — The Baby Boomers are one of the largest generations, and their retirement is putting pressure on the program’s finances.
- People Are Living Longer — While this is, obviously, pretty good news for them, it’s not making paying for their retirement benefits any easier.
- Fewer People Are Being Born — While benefits are extending with people’s lives, the younger people whose payroll taxes will pay for them are a shrinking demographic.
- The Retirement Age Might Be Increased — Accommodating the new financial paradigm could lead to major changes, with one proposal before congress calling to increase the retirement age to 69.