To say that our generation was misled about Social Security would be a gross understatement. Even the name “Social Security Trust Fund” is misleading. A trust fund is “a fund consisting of assets belonging to a trust, held by the trustees for the beneficiaries.” But, the truth is that most of the money that you put into Social Security is long gone. It was never held in trust. The government spent it.  

For decades, this model has worked for one simple reason. There were plenty of younger workers to pay for the relatively small number of retirees. The Social Security contributions from these workers more than covered the Social Security commitments that the government had made.

But, now, there’s a problem. In 2018, for the first time, Social Security will go into the red. This means that we will pay out more in benefits than we receive in contributions. If this doesn’t scare the pants off of you, it should!

Why? Because, according to the Social Security Trustees, the program is currently on track to run out of money in 2034. Once this happens, Social Security would likely only be able to pay our 77% of what it owes to retirees.

Personally, I think that even these bleak numbers are optimistic. But, let’s use them for now.

If We Love Social Security, Why Don’t We Protect it?

If I remember correctly, every President for the last 20 years has claimed that they would “fix” Social Security. President George W Bush said it. So did President Obama. And, President Trump? Yep, he said it too! They won’t.

The reason that they won’t fix Social Security is that there are no longer any easy answers. 20 years ago, we could have moved to private accounts. Even if we took this step today, which is unlikely, it wouldn’t save Social Security.

Instead, to “fix” Social Security, the government would need to anger the people it fears most – older adults. They know that we vote and that taking away our benefits or raising the retirement age would be political suicide.

This is why I say that only our generation can save Social Security. Without our support, any proposal to change Social Security will fail and our country will continue to sail towards a disaster of epic proportions.

As I said before, at this point, there are no easy solutions. And, before you say, “Just tax the rich,” you should know that there just isn’t enough “rich money” to go around. According to Forbes, Social Security is now $32-trillion (with a “T”) in the red.

No, the unfortunate truth is that saving Social Security would require some combination of the following:

Cutting benefits a small amount now

Raising taxes well beyond the 1%

Raising the retirement age

Allowing private savings accounts

Increasing legal immigration

Developing programs to help seniors stay in the workplace longer

If we choose to ignore the problem, which, at this point, seems likely, then we will be left will a different set of choices. Our future choices may include:

Printing a lot more money

Borrowing a lot more money

Cutting benefits a lot

Raising taxes dramatically

We Were Misled and It’s NOT Our Fault… But, it IS Our Problem

There are some people out there who blame baby boomers for the problems facing Social Security. Personally, I think that this kind of thinking is ridiculous. We paid into Social Security for decades. We worked hard and we deserve to receive the benefits that we earned.

At the same time, just because Social Security is not our fault, it doesn’t mean that it’s not our problem.

We have a responsibility to think about the health of our country. We have a responsibility to be a part of the solution. And since politicians fear us… no solution can appear without us.

What do you think should be done to fix Social Security? Are there any proposals that you are in favor of? Why do you support them? Let’s have a chat!