5 Issues to Know About Social Safety Earlier than Beginning Your Retirement Plan | Private finance
As long as people are working and paying into the system, which will continue unless the law changes, there will always be enough money in to pay out most of the promised benefits.
2. It is in financial trouble
While you don’t need to worry about not getting any benefits, you need to be aware that the social security financial situation is not perfect.
In particular, the trust fund is expected to dry up by around 2035. If this happens and the legislature does not come up with a solution, the program can only pay out benefits from the incoming wage taxes. The problem is that they are providing enough cash to pay only around 76% of the retirees due.
It is more than likely that lawmakers will prevent a 24% cut as no politician wants to oversee a major reduction in these benefits. However, some of the approaches to supporting the program finances, such as raising the full retirement age, would de facto also mean a reduction in benefits.
For this reason, future retirees cannot necessarily count on their benefits to be exactly what they expect under applicable regulations.
3. It only replaces 40% of early retirement income
Even at its best, current social security won’t be enough to provide 100% of the money you need for a comfortable retirement.