Most Americans worry that Social Security is going broke. Are they right?
(KenTannenbaum)
Countless Americans depend on Social Security to stay afloat financially in retirement — so much so that they neglect their own savings in the process. But new data shows that U.S. workers fear the program isn’t all that reliable in the long run. In fact, 78% of adults over 50 are deeply concerned about Social Security’s long-term viability.
The same holds true for 63% of workers who retired over the past 10 years. That’s the latest from a recent poll by the Nationwide Retirement Institute, which also found that almost two-thirds of current and future beneficiaries are worried about cuts to Social Security under the Trump administration.
Of course, it’s no secret that Social Security is on somewhat shaky ground headed into the future. But just how dire is the situation?
What does the future hold for Social Security?
In the absence of a crystal ball, it’s hard to say how things will pan out as far as Social Security is concerned. But here’s what we do know today. At present, the program is facing a sizable shortfall that, if left unaddressed, will result in significant cuts to benefits as early as the year 2034. Based on projections from the latest Trustees Report , come 2034, the program will only collect enough tax revenue to cover 77% of scheduled benefits — which means recipients will face a 23% cut.
But let’s be clear: That number isn’t set in stone. A lot can happen between now and 2034. Congress can intervene and come up with a way to fix the program’s shortfall. Tax guidelines can change in a manner that pumps more money into the program. There are a host of scenarios that might play out that ultimately make Social Security’s future less dire than it currently seems, so those who fear the program’s demise need not worry to such a degree.
That said, regardless of how things play out over the next 17 years, relying too heavily on Social Security benefits in retirement is never a good idea — and that’s without taking potential cuts into consideration. Rather, all working Americans need to take retirement into their own hands and look to Social Security as a means of supplemental income more than anything else.