Why Social Security Isn’t as Unreliable as You Think

Many people have fears about Social Security’s future. In fact, close to three-quarters of workers are reportedly concerned benefits won’t be available to them by the time they retire.

It’s understandable to be afraid of this possibility, because every year there are frightening headlines suggesting the retirement benefits program is going to run out of money. But while you may feel you have justification to suspect you’ll be cheated out of promised benefits, the reality is that Social Security isn’t nearly as unreliable as you think.

Here are two big reasons why.

1. Social Security constantly has revenue coming in

The main justification for people’s concerns that Social Security won’t last is that each year a report from the program’s trustees indicates the date when its trust fund will run out. Most recently, this report suggested the trust fund would be exhausted by 2033.

But this doesn’t mean what you think it does. Even if the trust fund runs out, Social Security won’t be out of money because it’s constantly collecting it. Current workers and their employers pay taxes on wages workers are earning. The money from this revenue is enough to pay out 76% of promised benefits.

Now, a 24% cut to benefits could be a big problem — but it’s not nearly as dire as getting none of the payments you were anticipating. Even in a worst-case scenario, you can still expect to receive close to the amount of income you were expecting.

2. Past attempts to modify Social Security haven’t been very successful

Since Social Security’s existing design ensures retirees will at least get the majority of their expected income, the only way you would need to worry about getting nothing is if lawmakers change the rules. And changes that would leave you with substantially reduced benefits are unlikely.

Attempts have been made in the recent past to modify Social Security in profound ways, most notably during the term of President George W. Bush. However, none of these efforts have been successful, and efforts to partially privatize the benefits program under the Bush administration drew major public consternation.

Major modifications to the program haven’t occurred since 1983, and both parties have become more partisan since that time, so the type of compromise necessary to make big changes to Social Security is less likely to occur. In fact, while President Biden proposed many changes to strengthen Social Security, no serious efforts have been made to put any of these modifications in place since he took office.

That said, it’s likely that lawmakers will eventually be forced to act to prevent an automatic benefits cut from going into effect if and when the trust fund runs dry. But the most likely result is that they’ll find a way to protect retirees from a major reduction in benefits rather than reducing the income seniors receive. After all, entitlement reform of any type that takes away benefits has proven to be very difficult — as evidenced by the failure of Republican efforts to repeal Obamacare under President Trump despite repeated promises to do so.

Rather than worrying about benefit cuts that likely won’t happen, you should instead focus on saving plenty of money so you don’t need to over-rely on Social Security. Even if lawmakers take steps to preserve benefits at the current level, Social Security isn’t enough to live on, and you’ll want plenty of savings to provide the added income you need for a comfortable life as a retiree.

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