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Social Security Is Not Going Broke!

Contrary to what has been reported in the news, the Commissioner of the Social Security Administration says that Social Security is far from going broke.

Over the past few years, reports have surfaced over and over again that Social Security is running out of money and is expected to start operating in the red after the year 2033. News organizations continue to report that with the retirement of millions of babyboomers over the next twenty years or so, Social Security simply cannot continue to operate in a sustainable fashion.

But according to the Michael Astrue, the Commissioner of the Social Security Administration, the reports are not necessarily true. "Please, please remember that exhaustion is an actuarial term of art and it does not mean there will be no money left to pay any benefits," Astrue warned in the trustee's annual report on the financial health of the Social Security program.

"After 2033, even if Congress does nothing, there will still be sufficient assets from payroll taxes to pay about 75 percent of benefits. That's not acceptable, but it's still a fact that there will still be substantial assets there," Astrue reported.

The report cautioned journalists that the wording being used in their reporting such as "depletion of funds," "exhaustion," "going broke," "running out of money," and other negative connotations about the health of Social Security should be curtailed because such insinuations are incorrect and they are scaring the general public.

Although the report does show reasons to be concerned due to the vast numbers of baby-boomer retirements, Astrue emphasized the need for cautious reporting. He said that Social Security is far from being broke as it takes in billions more than it spends when you include tax receipts and interest on bonds that are held in the Social Security Trust Fund (SSTF) and there are trillions of dollars in reserves.

Who are you to believe about the status of Social Security?

  • News agencies report on the issues and sometimes it takes time for all aspects of a particular story to come to light. Although it may not be the whole story, the information that is initially reported is good for the public because it sheds light on a subject that needs to be talked about and the status of Social Security is a very important story.
  • If the people who run the Social Security Administration don't speak up and let the public know what is going on, the news agencies are going to keep reporting on what they see as the truth. If the Social Security Administration feels put off by news reports that paint the situation as more grave than it really is, someone in the agency should speak out on a regular basis to assure the public that things are not as bad as has been previously reported.

Social Security is the primary source of financial security for most American retirees so any negative news reports about it's demise is of the utmost concern, especially in the wake of what has happened with the loss of personal savings, stocks, and the drop in real estate values over the past few years.

Social Security is not running out of money but if something isn't done in the near future to offset projected shortfalls, the way benefits are paid is going to be put on the table. This may include the reduction of the size of payments to retirees, higher payroll taxes for current workers and those who will be employed in the future, and a possible change in the age you can start receiving Social Security.

It is time for both parties in Congress, Democrats and Republicans, to set aside their political differences and work together in a bipartisan effort to fix the problems that are plaguing Social Security. Reforms are needed that would give everyone fair equity in the system and provide people with an idea of how they will have to make necessary adjustments to enhance their investment vehicles to provide a safe and sound retirement plan.

For more information on Social Security benefits, contact your local Social Security Administration Office or visit their website at www.socialsecurity.gov.

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