Social Security, established by President Franklin D. Roosevelt on August 14, 1935, is facing questions about its solvency as it turns 89 years old. The program’s trust fund for retirement benefits is predicted to run out by 2033, prompting concerns about the future of Social Security among Americans. A recent Gallup poll showed that 80% of respondents are worried or extremely worried about the availability of Social Security benefits when they need them.
According to financial planner Justin Rush, the depletion of reserve funds is a major risk to Social Security. While some believe that Social Security will disappear once the reserve funds are exhausted, Rush argues that retirees would still receive around 83% of their benefits. He emphasizes the need for changes to sustain the program in the long run.
Another challenge facing Social Security is the issue of retirement age. The retirement age to collect full benefits was initially set at 65 years old in 1935, but it was gradually increased to 67 in 1983. Republican Study Committee Chair Kevin Hern has proposed raising the retirement age to 69 as a potential solution. Rush believes that raising the retirement age could help balance the program’s finances.
The payroll tax is also a critical factor in the sustainability of Social Security. In 2024, the threshold for earnings subject to the payroll tax is $168,600. Democrats have suggested increasing taxes on the wealthy by making earnings over $400,000 subject to payroll taxes. However, opponents argue that removing the tax cap could lead to disparities in benefit payouts.
Population growth and life expectancy are additional challenges facing Social Security. The U.S. population has grown significantly since 1935, leading to a larger number of older individuals relying on Social Security benefits. With an increased life expectancy, people are collecting benefits for a longer period, straining the program’s resources. Rush emphasizes the importance of finding a bipartisan solution to ensure the long-term viability of Social Security.
Some younger Americans are already planning for a future without Social Security benefits and are exploring alternative retirement options. Rush notes that more young clients are seeking to secure their retirement without relying on Social Security. He stresses the need for both parties to come together and address the challenges facing Social Security to ensure its sustainability for future generations.
In conclusion, Social Security’s 89th anniversary serves as a reminder of the program’s importance and the need for proactive measures to address its financial challenges. While concerns about solvency persist, there is an opportunity for policymakers to collaborate on solutions that will safeguard Social Security for generations to come. Elizabeth Elkind of Fox News Digital contributed reporting to this article. For more Lifestyle articles, visit www.foxnews.com/lifestyle.
