Opinion: Social security is not going broke
|Published: 07-25-2023 11:57 AM
Christina FitzPatrick of Bow is the state director of AARP New Hampshire. For more information, visit aarp.org/socialsecurity.
Let’s set the record straight and bust the myth that Social Security is going broke.
Here are the facts: Social Security will not run out of money, as long as workers and employers continue to pay payroll taxes. It’s a pay-as-you-go system. Revenue coming in from payroll taxes largely covers the payments going out.
Social Security does face longer-term funding challenges. For decades it collected more than it paid out, building a surplus that stood at $2.83 trillion at the end of 2022. But the system is starting to pay out more than it takes in, largely because the retiree population is growing faster than the working population and is living longer.
If Congress doesn’t take action in the next 10 years to protect and save Social Security, your Social Security could be cut by 20% — an average of $4,000 a year. The last time Congress took major action to shore up Social Security’s nearly depleted reserves was 1983.
Another important fact to remember: Social Security is much more than a retirement account. It provides important protections that are equivalent to disability insurance and life insurance. It provides a stream of income for your lifetime and is also adjusted for inflation each year. You can’t get that from a standard retirement savings account.
We need to stop perpetuating the myth that Social Security won’t be there. It just isn’t true.
Yes, changes will be needed. People may need to work longer, absorb benefit cuts, or pay more in taxes. Or, what is more likely, we will need some combination of those strategies.]]>