Three Things You Should Know About the Future of Social Security

The Social Security Trustees just released their annual report on Social Security’s finances. It’s provoked a number of misinformed “the sky is falling” stories from journalists who should know better, as explained by the Columbia Journalism Review.

To get the facts, you can watch this short video which answers the question, “Will Social Security be there for me?” Or you can read on:

• Social Security can pay 100 percent of promised benefits for the next 20 years, until 2033, even if Congress takes no action. And after 2033, Social Security won’t be broke; payroll taxes will still cover 75 percent of promised benefits.
• It isn’t difficult to close the long-term financing gap and ensure that future generations get 100 percent of promised benefits. One way Congress could do it is by requiring high earners to pay Social Security payroll taxes on all of their earnings, which 94 percent of Americans who earn less than $110,100 a year already do.
• Social Security will run a surplus this year—and the year after that, and the year after that, until 2020. That’s right—even though Social Security will take in less in payroll taxes than it pays in benefits this year, it will have money left over to deposit in the Social Security Trust Fund after it pays all benefits due. That’s because Social Security also earns interest on the $2.7 trillion in bonds it currently holds in the Social Security Trust Fund.  

Yes, over the long term, Social Security faces a shortfall, and Congress shouldn’t wait twenty years to deal with it. But cutting Social Security benefits that are already modest, especially for women, is the wrong way to do it. Congress should not only strengthen Social Security’s financing but increase benefits to improve women’s retirement security: Senator Harkin’s Rebuild America Act, shows one way these goals can be accomplished.

Bottom line: Social Security is fundamentally strong. The real threat to Social Security comes from those who claim that Social Security faces an immediate crisis and the only way out is to slash benefits or privatize it.