3 Terrifying Truths about Social Security

Social security is something that many of us rely on, or at least plan to rely on one day. However, it’s not as foolproof and guaranteed as many people seem to think. Congress recently considered a budget that could potentially change disability payments, and other changes have been suggested and/or are in the works. Even though it may be a little frightening to think about a future without social security or with social security that’s significantly less than you imagined, it’s important to be aware of what’s going on in the financial world and of how it could potentially affect you. Even beyond that, it’s

important to be aware of the truth about social security and to understand how it works…even when that truth is a little scary.

Terrifying Truth #1: Social Security is Running Out

Social security first came into being back in 1935. It is funded mostly from taxes taken from American workers. For a long time, this arrangement worked well, with the social security fund always taking in more taxes than it paid out. For the last five years, however, that hasn’t been the case, and the social security funds are slowly slipping away. If the social security deficit continues to be a problem, and it’s looking like it will, there’s a big chance that funds will be gone within the next twenty years or so!

Terrifying Truth #2: Disability is Dwindling

As mentioned, there’s an ugly deficit of social security funds, and that includes disability benefits. In fact, it especially includes disability benefits. These benefits are financed by a federal trust fund, which is likely to have been completely drained by next year!  That doesn’t mean that the disabled will do without, but it does mean that their payments will put the US into further debt and that those receiving disability benefits will experience a big drop in the amount they receive. There is a chance that the US may decide to take funds from the retirement trust fund and place them in the benefits fund, but that’s still going to create monetary problems in the long run.

Terrifying Truth #3: Almost Everyone is Relying on Social Security Benefits

Of the people leaving the workforce in the near future, the vast majority are seriously not ready to retire. Less than half have saved money for retirement, and even those who did have found themselves in financial trouble as a result of the recession. With little or no savings, most retirees or soon-to-be retirees are dependent on social security payments, but as you can see, those aren’t as guaranteed as was once thought.

In fact, in terms of financial matters, nothing is really guaranteed in this life anymore. That’s why it’s so important to have a workable plan, no matter what happens. To stop feeling uncertain and to start feeling secure again, work with a financial advisor to develop a “game plan” for your future.