![]() This type of attitude is detrimental to your long-term wealth. That they are resigned to a poorer future. That they have no control over the situation. Instead, workers seem to believe that Social Security will just wither away. Given how integral the old age pension program is to all Americans, either those currently retired or future retirees, you’d think Millennials would be rioting in the streets, demanding a solution before the eldest of them starts claiming benefits in about two decades. Social Security actually reduces wealth inequality.Without Social Security, 20 million Americans would descend into poverty.Social Security makes up 60% of the wealth for a typical household helmed by someone between 55 and 64.Half of current retirees count on Social Security for half of their income.It’s almost impossible to overstate just how key Social Security is to your long-term finances. Social Security Is Crucial to Your Retirement In other words, as long as there are Americans working and paying taxes, Social Security will continue to pay out benefits, even if they’re somewhat reduced from current levels. That’s because your monthly check is paid for by the payroll taxes of current workers as well as from the trust. And should that happen, retirees would still receive approximately 76% of their benefits. Social Security will not be depleted in 2033-the OASI Trust Fund would be. Yet in a tweet on their write-up of the report, the New York Times began “Social Security will be depleted in 2033…” Specifically, the report stated that the Old Age and Survivors Insurance (OASI) Trust Fund, which helps pay the benefits for current retirees (among other eligible Americans), was scheduled to be depleted in 2033, a year earlier than was believed the year prior. The headline stated “Combined Trust Funds Projection Depletion One Year Sooner Than Last Year.” To wit: The Social Security Board of Trustees put out a press release for its 2021 annual report on the long-term finances for the Social Security trust funds. So why does this myth about Social Security persist? One reason may be the way the popular press covers Social Security news, using the program’s name as shorthand for its trusts. Why People Think Social Security Will Go Bankrupt Here’s what you need to know about the confusion surrounding Social Security’s much-reported demise and how you can cut through that noise to position yourself for a comfortable retirement. “There is so much widespread misunderstanding that the trust fund being depleted is synonymous with bankruptcy,” said Catherine Collinson, chief executive of the Transamerica Center for Retirement Studies. If history is any guide, Social Security will likely be the most important source of retirement income when today’s workers hang up their spurs. Millennials will get many plenty of checks when they retire. Nearly half of Millennials indicated they believed they wouldn’t get a penny in Social Security benefits.įortunately, those concerns were misguided: Social Security is not going bankrupt. A majority of Boomers, many of whom were already receiving checks, said they were worried that they would stop getting monthly payments. Somewhere along the way, everyone started to believe that Social Security was doomed.Ī 2021 survey by Nationwide found that roughly four in five Millennials and Gen Xers were concerned about Social Security running out of funding in their lifetimes.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |