Can the Budget Support Social Security?

With new survey results the question that is on everyone’s minds is: can the budget support social security? While we can’t give you a universally valid answer to this question, we can present the most recent opinions on social security benefits as they have been observed during a recent survey.

Market analysts at the Employee Benefit Research Institute have conducted a recent survey to determine if young and old U.S. residents remain confident in the benefits of Social Security. Results have revealed that people have gained part of their confidence back, but there is still much reluctance left.

The younger employees are the most diffident. The majority of them think it will take too long for them until they will retire and receive Social Security. Their diffidence is further fueled by the diminishing budget that the U.S. government uses to cover these expenses.

Their fears might be somewhat justified considering that there are 77 million baby boomers who will reach retirement age at the same time. This means, the allocated money would have to be divided between all these 77 million retirees. Not to mention the people who have already retired, many of them being over 90.

Past surveys have revealed that people live longer now than they used to in the 1980s. The population of 90-year-olds has tripled during this time interval, so the social security system will have difficulties providing a source of income for all of them.

In case you were thinking Social Security got you covered, you are wrong. The sums of money are already modest and there are chances they will become even smaller when the aforementioned stress factors will start making their presence felt.

At present, the U.S. government offers a monthly check of $1,335 to retirees, that is, $16,000. The small sum could become even smaller next year, given that the U.S. government has recently informed us that they will no longer cover the cost-of-living adjustment. This boost, also known as COLA, was meant to cover additional costs caused by inflation.

All the aforementioned factors, topped with the removal of COLA have fueled workers and retirees’ diffidence in Social Security. Those 63 percent workers, who doubt they will ever benefit of this money once retired, can and should start saving. Young employees, who want to calculate their Social Security benefits can do so with the help of online calculators.

Image source: www.pixabay.com