No matter who is in control of Washington DC, we seem to always have the same question looming about Social Security. Will Social Security Retirement and/or Disability even exist when you retire or if you become medically unable to work?
There was a recent Social Security Trustees Report that says the “Funds” will run out by 2034.
Stories that scare people are all over the internet, and seem to be most rampant on social media. As a lawyer who has practiced in the area of Social Security Disability for over 15 years, I believe these reports are mostly are overblown. Social Security will not collapse. “Funds” don’t even pay most Social Security benefits. Most payouts come from current workers’ taxes.
However, the real question is will this be enough money to live on when I retire. This same question should be asked of whether or not your disability monthly amount is large enough to live off of.
If Social Security budgeting problems seem urgent, lawmakers can always just hike taxes or they may even tweak benefits. The DC politicians already did this in 1977, after the failed 1972 cost of living formula that brought overly generous benefits. Patching the cost of living formula created large future benefit cuts. But, it did leave a problem. The 1983 “patch” hiked payroll taxes, cut benefits and delayed cost-of-living increases, which really just paved over another payout pothole, congress is now dealing with.
But, if you have budgeting problems because you are no longer able to work due to age or disability then you do not have that luxury. My only advice to my clients is to prepare for a day that you can no longer work, and save more. Social Security will never take care of you.
Don’t worry about the future of the Social Security Administration, but do worry about your future!