Times are hard, and they are made even more difficult by the uncertainty of the unknown. There has been much discussion regarding a program taken for granted by many, Social Security, and the shaky foundation upon which it stands in the future. For people who have paid into this program for their entire lives, the thought that it may all disappear is frightening. Many retirees rely on it to support themselves in the later years of their lives.
So is Social Security going to completely disappear? Is this fact or fiction?
The truth lies somewhere in between. The real impact of the government’s shrinking cash flow is that those monthly payments may begin to decrease. In all likelihood, Social Security will be around for years to come, albeit with diminishing returns. This does, however, create a quandary for those workers caught in the middle of the transition, who have paid a great deal into the program but might retire with fewer benefits than those before them.
What is certain is that something has to change in the government’s practices to keep Social Security alive and well. Several solutions have been proposed, such as instituting a more progressive payroll tax or raising the retirement age, but their ultimate bearing on the future of Social Security is still ambiguous. It may be advantageous to factor this potential decline in future payments into your planning process in preparation for the worst, however.