Should You Count On Social Security In Your Golden Years?
Social security is a social program designed to create a safety net for older Americans who have insufficient retirement income. There are questions about the future of the program from a financial perspective. This, of course, raises the question of whether you should count on social security as part of your retirement planning.
Social security is often criticized as a government program that is nearly bankrupt. This criticism is not entirely correct. In fact, it isn't really even remotely correct. While it is true that Social Security does not have a significant amount of money in it, this is not due to a problem with the program.
Social security has actually run a surplus for most of its life. This simply means it has brought in more money than it paid out in benefits. So, where did all the money go? Congress passed a law long ago that required the surplus to be used to by special treasury notes. Yes, Congress basically swiped the money to spend it on government programs and the interest on the national debt. Social security now needs this money back and Congress doesn't have it. Welcome to Washington, D.C.!
Will social security disappear in the coming years? It is unlikely. No politician can afford to be the person to sign that bill. Instead, the retirement age for qualifying for benefits will continue to be raised. At the same time, we can count on benefits being paid out to be cut.
This scenario is going to be an example of much of what we see in the United States in the next thirty years or so. The national debt is reported as $13.2 trillion dollars, but this is not accurate. The real national debt is upwards of $75 trillion. How so? Well, debts like those owed to social security are not included in the national debt calculation. If you and I used such accounting practices, we would probably go to jail! Still, this is how the government works.
While social security will not disappear, you would be wise not to rely on it in any way. Sadly, this may start to become a trend when it comes to government services in this country.
Social security is often criticized as a government program that is nearly bankrupt. This criticism is not entirely correct. In fact, it isn't really even remotely correct. While it is true that Social Security does not have a significant amount of money in it, this is not due to a problem with the program.
Social security has actually run a surplus for most of its life. This simply means it has brought in more money than it paid out in benefits. So, where did all the money go? Congress passed a law long ago that required the surplus to be used to by special treasury notes. Yes, Congress basically swiped the money to spend it on government programs and the interest on the national debt. Social security now needs this money back and Congress doesn't have it. Welcome to Washington, D.C.!
Will social security disappear in the coming years? It is unlikely. No politician can afford to be the person to sign that bill. Instead, the retirement age for qualifying for benefits will continue to be raised. At the same time, we can count on benefits being paid out to be cut.
This scenario is going to be an example of much of what we see in the United States in the next thirty years or so. The national debt is reported as $13.2 trillion dollars, but this is not accurate. The real national debt is upwards of $75 trillion. How so? Well, debts like those owed to social security are not included in the national debt calculation. If you and I used such accounting practices, we would probably go to jail! Still, this is how the government works.
While social security will not disappear, you would be wise not to rely on it in any way. Sadly, this may start to become a trend when it comes to government services in this country.
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