Why It’s Mathematically Impossible for Social Security to Go Bankrupt
We keep hearing reports that Social Security will be bankrupt in nine years. That is not true. However, according to an article by The Motley Fool, Social Security is “contending with a $22 trillion (and growing) long-term funding obligation shortfall.”
Social Security’s funding issues are due largely to demographic changes in our country. Baby boomers are now retiring and claiming benefits. At the same time, there are fewer working people to make up for the deficit in payroll taxes. Additionally, things aren’t likely to improve anytime soon because U.S. birth rates are near an all-time low. The article also points out that the rising income inequality is another problem, “with considerably more earned income exempted from the payroll tax than 40 years ago.”
All this leads to the common message that Social Security is growing broke. But, as the article explained, it is mathematically impossible for Social Security to grow broke for “as long as people continue to work and pay their taxes, Social Security will collect revenue that’ll ultimately be disbursed to eligible beneficiaries.”
However, that doesn’t mean that Social Security won’t be forced to reduce benefits. Current estimates are that retirement benefits may be slashed by more than 20% by 2033.
Solvency Solution
Certainly, nobody wants to see that happen. The Seniors Trust believes the best way to save Social Security is the Social Security Expansion Act. This landmark bill buttresses the long-term solvency of Social Security by expanding benefits for seniors – not cutting them.
When passed, this legislation will require the wealthiest Americans to pay their fair share. This legislation would lift the income tax cap and subject all income above $250,000 to additional Social Security payroll tax. Not only would this help refill Social Security’s trust fund coffers, but it would also expand Social Security benefits by $200 per month across-the-board.
If you agree that this is a viable means of solving Social Security’s solvency issues, please show your support by signing our petition to Congress and join us as we work to improve the lives of senior citizens.
