Social Security goes Bankrupt in 2033

Posted in: Economics, Retirement Planning, Taxes

Social Security has been the bedrock of a lot of Americans retirement planning for decades now. We are well aware of the mismanagement by the government, but are we aware of the effects of this mismanagement?

Social Security trustees announced on April 23rd, 2012 that the social security trust fund value would be zero in 2033. In 2007 the trustees estimated the fund would be depleted in 2041.  Our country is destroying a program that is vital to many of its citizens. How will we repair this dramatic shortfall?  What will happen to the bankruptcy year for Social Security if the economy suffers another downturn?

Bankruptcy isn’t a quarter of a century away anymore. It’s only a decade away! For those of us in our 50’s or older how fast is a decade? This means that many people now on the program will have to deal with the bankruptcy of Social Security.

What does it mean and what will happen when Social Security goes bankrupt, and what will happen when it does?  Get the latest annual statement, and read the front.  It says the trust fund will be exhausted so the only money available to pay benefits will come from current FICA or payroll taxes.

Social Security Administration

According to Social Security that is only enough to pay around 75% of the benefit. Social Security really could become a pay-as-you-go program. Could you afford to lose 25% of your income?

The government knows that it cannot allow Social Security to go bankrupt, they will prop it up somehow. Higher taxes, fewer benefits elsewhere. This is an issue that affects all Americans not just those close to retirement age.

I encourage you to do your own research.  Below are some excellent articles written on this topic. If you want to discuss this further please contact our office.

Social Secuirty reserves to run dry by 2022
The Washington Times, February 12, 2012; page 3
Read the full article

Social Security Is Failing Even Faster Than We Thought
Daily Finance, Februrary 14, 2012
Read the full article

The Latest Social Security Shell Game February 20, 2012
Read the full article