Podcast Episode 324: Is Social Security Going Bankrupt?
The topic of Social Security comes up all the time in our office, especially when it comes to its future. Is it heading towards bankruptcy as some suggest, or is this an alarmist notion blown out of proportion? To answer these questions and more, Certified Financial Planner® Heath Grossman joined the podcast to offer his perspective on the much-debated future of Social Security.
The biggest concern for pre-retirees and retirees is whether there will come a time when the benefits will dry up completely. Heath breaks down the core of the issue on the show, but the increased longevity by Baby Boomers paired with less money coming into the fund has brought about the issue. That’s the reason why projections tell us that it will go bankrupt by a certain date.
That’s the math, but what’s the reality? Politicians will likely leverage this issue during campaigns and a solution(s) will be created before the benefits dry up. There are different ways to solve for the issues Social Security faces. One proposed solution is to raise the full retirement age, which would effectively be a benefit cut without directly calling it one. Another suggestion is the introduction of means testing, which could reduce benefits for those with significant retirement savings.
So much of this is out of our control but there are some things that are within our control. Heath emphasized the need for younger generations to start taking their retirement into their own hands by saving diligently in retirement accounts and building up a nest egg for the future. And for those that are approaching retirement and getting ready to take Social Security, sit down with a financial professional and put a plan in place. Don’t react to the headlines by taking your benefits as soon as possible because that might not be your best option.
The future of Social Security may seem complex and fraught with challenges, but it is far from a lost cause. To wrap up the podcast and the conversation today, it is crucial to start planning for retirement early, base Social Security collection decisions on individual retirement income strategies, and stay informed about potential changes and their implications.
Remember, it’s about navigating the twists and turns of Social Security’s future, not fearing them. If you want to learn more about Social Security and the strategies you need to be considering, reach out and get one of our Social Security Decision Guides for free.
Here’s what you can expect to learn in this episode:
- While it’s not necessarily sensationalized, Heath doesn’t believe it will go bankrupt.
- How Social Security pays out its benefits and why the fund is running out.
- Don’t let this concern lead you to take your benefits as soon as possible for that reason only.
- What are some of the things that could be done to fix the problem?
- Should you be prepared for the Medicare age to rise as well?
- What are the things we can control related to planning and Social Security?