Many Americans believe Social Security won’t exist for much longer, but honestly, that couldn’t be further from the truth.
This past June, The New York Times posted a doomsday report on the future of Social Security. It claimed that a slow-moving crisis is approaching for Social Security, and that unless an urgent political solution is reached in the near future, Social Security would be depleted within 15 years.
The story doubtlessly scared a lot of seniors, imminent retirees, and the 10 million-plus Americans currently collecting Social Security Disability benefits, but the article is highly misleading.
USA Today presented a more accurate outlook: it declared that the system was not facing insolvency. Even if Congress fails to address the issue, Social Security would still be able to pay about 80% of payable benefits, which is a lot more than what The New York Times claims is looming ahead.
The Truth About Social Security Going Bankrupt
Social Security has a surplus of $2.9 trillion. This means that the system can pay all owed Old-Age and Survivors Insurance (OASI) benefits through 2035, and Disability Insurance (DI) benefits through 2052.
After that, OASI will be able to pay nearly 80% of what’s owed, while DI could pay 91%. That’s a far cry from “Social Security will be gone forever so retirees and disability claimants better have a plan B,” as the Times claims.
The Social Security Trust Fund has been built up over multiple decades, and it’s not going to just disappear. If Congress doesn’t take action, benefits could potentially be reduced — which is why the Social Security 2100 Act has been proposed. The Act aims to help ensure that Social Security benefits continue to be available to those who need them.
Social Security 2100 Act
Introduced by John B. Larson, Democratic U.S. Representative for Connecticut, in January 2019, the Social Security 2100 Act seeks to increase Social Security solvency over the next 75 years. It includes the following proposals:
- Those who are currently receiving benefits will receive a raise equivalent to 2% of the average benefit.
- The formula used to calculate yearly cost-of-living adjustments will be based on the Consumer Price Index for the Elderly.
- Minimum benefits would be set at 25% above the poverty line.
- The limit for non-Social Security income (before benefits start being taxed) would be $50,000 for individuals and $100,000 for couples. (The current thresholds are $25,000 and $32,000.)
How Could This Affect You?
To pay for these changes, payroll taxes will be raised on wages over $400,000. At present, wages up to $132,900 are taxed. Payroll contributions from workers and employers would gradually increase from 6.2% to 7.4% between 2020 and 2043. This increase will only cost the average American worker an estimated 50 cents more per week each year.
Coincidentally, the Social Security 2100 Act was introduced on January 30, which also happens to be the birthdate of President Franklin D. Roosevelt, who signed the Social Security Act of 1935 into law. He described the legislation as the cornerstone of a structure that is a work in progress, and for decades afterward, policymakers have carefully built on it. This new piece of legislation, if passed, can preserve the former President’s vision and ensure that all retirees or disability claimants continue to live with their dignity intact for decades to come.
Do You Need to Apply for SSD Benefits?
The Law Offices of James Scott Farrin has helped thousands of clients fight for the Social Security Disability benefits they need to meet their healthcare and living expenses.1 Attorney Rick Fleming is a North Carolina Board-Certified Specialist in Social Security Disability law and a tireless advocate for injured and disabled North Carolinians. With a strong record of successful SSDI and SSI claims and appeals,1 Rick and the SSD team are ready to help you. For a free initial case evaluation, please call 1-866-900-7078 today.