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You Will Receive Social Security

November 11th, 2008 · 4 Comments

   Written by J.P. Wicklein 

     Barring any changes the social security trust fund is expected to run out of money around the year 2041.  My generation (the border of Gen X and Gen Y) has been told to assume that we can’t count on receiving a social security check during our retirement years.  This is a good thing in that it provokes people to save for retirement with their own funds.  That said, I think that social security checks will be paid out for decades after 2041.

    Why?  Social Security is just too popular of a government program to die.  If the government stops sending social security checks to retirees, incumbent federal politicians will find themselves without a job in the fall.  Sooner or later (probably later) Congress will act to ensure that social security continues past 2041.  I think Congress will enact most, if not all, of following measures that will enable social security to continue for decades after 2041: 

1)   Increase the minimum age at which you can receive social security.  

2)   Raise social security taxes.  (Although Congress hasn’t done this in a while they have a long history of raising social security taxes.  See the table below.)

3)   Reduce benefits.

4)   Disallow benefits for those with substantial 401k or IRA account balances.

     That said, you should still assume you won’t be getting a social security check and don’t count on the government to provide for you in your retirement years.  

 

Source:  U.S. Social Security Administration

Tags: Retirement · Social Security

4 responses so far ↓

  • 1 Justin @ FixThePig // Nov 12, 2008 at 10:38 pm

    At the rate the US Government and Treasury department are borrowing and lending money, I don’t think I want to wait around and bank on SS being there when I retire. The program was never designed to be a retirement fund but more of a safety net, however over the decades it has become many people’s retirement plan.

  • 2 Financial Fellow // Nov 12, 2008 at 11:01 pm

    Thanks for the comment, Justin. I agree with you on not holding your breath that the federal government will provide Social Security to future generations. That said, I think the fact that many folks have made it their retirement plan may cause the government to keep the program going. That said I could be wrong… (Sometimes its fun to write a contrarian article).

    On a different note, I liked your picture of the bear waving goodbye in your article “Goodbye Ford, GM, and Chrysler”. Nice touch.

    John

  • 3 ryan // Jan 16, 2009 at 12:43 pm

    you said…”4) Disallow benefits for those with substantial 401k or IRA account balances”

    I’ll add one:

    5) Raise taxes (penalize) those who had 401K’s and IRAs

    So then you actually won’t get your SS if you save. If that’s the case, they shouldn’t put limits on 401K’s or Roth IRAs!!!

  • 4 Financial Fellow // Jan 17, 2009 at 2:34 pm

    I agree with you, Ryan. I think they could just decide to penalize you for having too much of your own retirements savings as well. I’d be rather upset by that.

    I read something the other day that referred to social security as a government mandated pyramid scheme. We’ll see if it winds up that way…

    Thanks for your comments!

    John (Financial Fellow)

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