Your Financial Future

If you owned a business that was gaining 10,000 customers a day, you would probably be hiring additional staff and opening new locations. To retain these clients in the commercial world, you would have to provide excellent service. After all, time is money.

            Yet, in the public world, an entity that is growing at this speed is closing locations and cutting staff. This entity is Social Security. Many people are frustrated. There used to be local SS offices where you could stop in and get many questions answered. That trend was already moving backwards before the pandemic struck. You had to have an appointment and it could take weeks to get an appointment.

            Recently Andrew Saul, Commissioner of Social Security gave an updated report. He said that the physical foot print will most likely continue to shrink. They want to provide more services online. It has been reported 65% of first time claims for disability benefits are denied. It is estimated that there are one million people waiting for a disability hearing. Wait times have been estimated at up to 600 days.  The system needs to find a way to process legitimate claims quicker. Social Security must also recognize that many seniors are not as computer savvy as younger Americans.

            Social Security is facing a funding issue in only fourteen years. When SS was created, it was always a program where current workers funded the benefits for those recipients receiving checks. While Baby Boomer were working this was not much of an issue. With 10,000 turning 65 everyday, the percent of workers to retirees is shrinking. This, combined with a longer life expectancy, has actuarially challenged the funding model.

            We faced a similar situation in 1985. Just two years before Social Security would have had to make benefit cuts; Ronald Regan and Tip O’Neil reached an agreement. That was when the full retirement age was gradually raised to 67. The contribution rate was increased and up to 50% of Social Security income became taxable.

            With 2035 getting closer, Washington will have to reach some compromise. It is projected that without these changes, beneficiaries may only receive 79% of promised benefits because of the ratio of incoming tax revenue verses promised benefits. The pandemic had a negative impact on this situation because unemployed workers do not pay into the system.

            When these discussions do take place, there will be some politicians suggesting that benefits are increased. As any responsible family knows, you do not increase spending when you have a budget short fall. We cannot continue increasing the deficit. Maybe some of the almost two trillion dollars spent recently could have shored up a benefit that seniors contributed to their whole working lives

            Social Security considers your 35 largest earning years when calculating your retirement benefit. You and your employer paid these taxes. Hard working Americans deserve to know that their promised benefits will be there.

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