Hello everyone,

While doing general reading and research on my own, I came across a well-written and to-the-point article about a very HOT TOPIC for most Americans getting close to retirement… or thinking they will rely solely on Social Security.

Please give this close attention and remember that if you do not plan for retirement, you are potentially setting yourself up to fail in your retirement years!

— Lance

Is This All-Important Retirement Fund Going Broke? 

By Steve Garfink 

Is Social Security going broke? 

It’s a fear so many people have because politicians of both parties regularly gin up these worries so that they can raise donations to feed the endless demand for money for re-election campaigns. They don’t want us to know that Social Security will eventually be fixed, never mind to actually vote on the fix! They can do that down the road, closer to the last minute, as they did back in 1983… In the meantime, they don’t want to give up that easy annual fundraising. 

Social Security is primarily funded from the payroll taxes taken out of our paychecks. Given the large numbers of workers laid off and otherwise kept from their jobs throughout the pandemic, it is logical to think that payroll tax collections must be way down—and that can’t be good for Social Security’s long-run solvency. 

The truth is that the situation is complicated. Very complicated.

Unemployment has been prolonged and remains high. Workers on unemployment compensation do not owe payroll taxes on those benefits. On the other hand, most of these unemployed workers have been concentrated at the lower end of the wage scale, so their payroll tax contributions are lower on average. By contrast, because of the various bailouts over the past couple of years, large numbers of workers remained on the regular payroll, even when they were sent home from their jobs because they were deemed non-essential. In their case, payroll taxes continued to be withheld and paid to the Social Security Administration. 

One way to think of the Social Security program is like one of those super-huge container ships. The pandemic was like sailing through a nasty storm. The ship got knocked a bit off course. Indeed, Social Security was already a bit off course: It’s well understood that the Trust Fund will be used up by the mid-2030s and thereafter there will be a shortfall. 

But, the fact is, the fundamental solutions are well understood, offering plenty of room for reasonable compromise by both parties. The program can be restored to a solid footing without cutting anyone’s benefits and without imposing any unreasonable strains on the U.S. economy. 

Politicians know this. Sadly, getting them to give up their easy fundraising by fear mongering around this issue is unlikely—until the last minute. For better or for worse, that’s how our politicians roll.

Don’t let the fear mongers fool you. The program will be fixed because it is easy to do and so darn popular with the entire public. Your benefits will be there for you in full: BUT this message is NOT approved, endorsed, or authorized by the Social Security Administration. All information regarding Social Security discussed or mentioned here is available for free from the Social Security Administration.

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