Social security has been around since 1935 and ever since then it has been promised as a support fund to assure our elderly generation has a comfortable and safe retirement. While social security may only be paid out to Americans in their later years, it certainly has a big impact on every working citizen, currently 6.2% of every employee paycheck goes to the social security fund, and another 6.2% is matched by employers. This means that 12.4% of all individual plus business income goes straight to our social security fund!
But what happens when our population collecting social security begins to outpace our population paying into the fund. This is where we are headed very soon, in fact a recent report just came out claiming that social security is only going to be able to pay 75% of what it pays now, starting in 2033. Currently the retirement population makes up 17% of the country, and by 2060 this will rise to 24%, nearly a quarter of the country will not be working. Well, pair this with a decreasing working population currently at 62% and headed down to 57% by 2060 and it is easy to see why the social security is running out fast.
For the longest time social security benefits have been a key part to most Americans retirement plans, for some it is their main source of income. Retirees can begin collecting social security at 62, but it is mostly recommended to hold off and begin collecting at your full retirement age. This is because collecting early will reduce the amount you will receive from the government it can be anywhere from 20-30 percent! If you would like a quick estimate of your monthly social security benefits visit https://www.ssa.gov/OACT/quickcalc/ to find out what you can expect to receive in retirement.
While retiring at full retirement age will get you your full benefits, we normally recommend holding off until 70 if possible, this will get you above and beyond your full benefits, it may even bring your benefits to over 130%!
So what will happen next? Is social security headed out the door all together soon? Well for now no, there is still plenty in the fund and more goes in everyday, it just might not be 100% of what was expected come 2033. However, as more and more Americans become aware of this a lot could get done by the government. Currently there is not much being talked about this issue in Washington, but that can change starting with you! If you live in Missouri visit https://www.govtrack.us/congress/members/MO for a full list of current Missouri senators and representatives. If you feel like the social security issue is a big deal then give a senator a call or one of your local representatives. Change begins at the ground level, and it only takes a little bit of noise to get the whole nation talking.