Worried about Social Security? So are most other Americans - CNBC
In a recent survey, over 70% of Americans worry about the future of this critically important national retirement program. After all, most current beneficiaries say that Social Security is a “major” part of their retirement income – one that would wreak havoc on their finances if not there. And many not yet retired also know that the program’s financial health is at risk, so are similarly worried. For sure, much has been recently written about this to make the public aware, as in this CNBC article by Lorie Konish.
The problem, in a nutshell, is that payroll taxes from American workers are now insufficient to pay all benefit obligations, so money is withdrawn from Trust Fund reserves to make up the difference. According to Social Security’s Trustees, those reserves – now about $2,8 trillion – will be fully depleted by the year 2033 unless Congress acts to restore Social Security to solvency. If the reserves are depleted, all Social Security beneficiaries would receive only about 70% of their normal monthly amount, so the problem is becoming increasing critical for those in or nearing retirement. So, what must be done?
Congress has known about this problem for decades, but has not yet enacted reform to restore Social Security to solvency. Historically, Congress seems to wait until the last possible time to take corrective action but, with Social Security, waiting longer only makes the solution more difficult. Among others, the Association of Mature American Citizens (AMAC) has relentlessly encouraged Congress to enact legislation to reform Social Security to restore the program’s financial health. AMAC continues to lobby Congress to take for corrective action soon, and has offered suggestions for reform (see this).
In this informative CNBC article, Lorie Konish reveals the results of a recent BankRate survey about Social Security solvency, and offers suggestions from several Financial Advisors on how to best plan your retirement future in the face of possible benefit cuts.