Suze Orman TwitterSuze Orman FacebookSuze Orman YouTubeSuze Orman LinkedIn
View Blog & News List

What You Need to Know About Social Security “Going Broke.”

September 24, 2015 at 12:00 AM

You know that I think it is smart to delay taking Social Security as long as possible, so you can then receive the biggest possible Social Security payout. But I often hear from many of you that you are worried this doesn’t make sense, because you stand to lose out because Social Security is “going broke.”

The going broke message is the favored phrase among politicians who are more interested in fear mongering than facts.

FACT: Social Security will never be insolvent. When you hear the phrase “going broke” you probably (logically) think that means Social Security will be bankrupt and incapable of paying you a dime. But that’s not true!

Here’s the deal: In about 19 years or so the system will run into a cash flow problem. The money it takes in from workers paying their FICA tax will be less than the benefits Social Security will be paying out. This is all a function of Baby Boomers. Once all the Boomers are in retirement and receiving their Social Security benefits, the cost of those benefits will exceed the fresh payments into the system that younger generations are making.

That is definitely a problem. But here’s the one thing I want you to always understand. Even if we do absolutely nothing to address this problem—that is, if Congress just keeps punting on this--retirees will at worst still receive at least 75% of their promised benefit. I wholeheartedly understand that a 25% reduction in benefits is huge and troubling, but it’s also a heck of a lot more than the “zero” payout that is the implied message of the fear mongers who talk about the system going broke.

And I remain confident that the problem will eventually get fixed. Let’s hope sooner than later. And I bet that as happened in 1983 when Social Security was last reformed, older workers (and those already receiving benefits) will not be thrown for a loop. For example, the program was reformed in 1983. Among some of the changes, the Full Retirement Age was raised from 65 to 67. But the change was phased in over years, and no worker who was older than 45 in 1983 was impacted by the change.

Tag Cloud

dangerous money seasoniffy incomeno apologysame-sex marriagealternative FICO scoreback-to-school budgetaccelerate dental workget over life insurance phobiaOne Wallet At A Timepresident Obamaitemized deductionmonthly dental insurance premiummax benefit coveredFinancial Gift Cliffovercome financial fearsCiti Simplicity Card buying car 2016closing costs 2% of loanpaid vacationreduce withholdingunsubsidized Stafford loanSuze approvedgay marriage ban end Florida better loan dealsmarriage inequalitySelfishautomatic paymentdon't spend federal student loan deferment healthy retirement weightsecure creditfinancial concernholiday spendingprescription tiertax ID theftbill paying prioritieswrite new goalresponsibleHDHP/HSArefinancepush yourself to save more for retirementEmergency Savingspay 100% cashconfidentNew York Lifeearn more on savingsLong Term Care premiumsadult childrenhealthy aging sidelinedLong Term Care Insurance calculate dependents annual income needsIRA contribution gifted moneybest interest ratesdon't blow tax refundARM CautionNew american Dream switch to spouse coverageritual scheduleultimate compounding giftcnbc alarm clocksave moneyteach importance of helping othersone annual feeschedule vacationphysical healthfinancial independenceaffordabilitycar buying mistakesemployer funding HSAearn allowancebe true to yourselfwomen long term careonly offered while employed studentSatisfyingnegotiate points with bank or sellersavings pleasurestay positivedon't extend mortgage is it necessarydon't derail retirement savingsRevocable TrustFinancial Solutions For Youno private loansletter to suzereduce monthly paymentprotect and provide for minor child costly legal mortgage disclosurelow-cost index mutual fundoverspend on nights outnear historic lowsGay RightsLTC shoppingPhyllis Shelton expert long-term carefraudulent returnshort term goal eliminate credit card debtloan big picture age appropriate choremoney-aware childFederal Reservecreate new truthCory Bookerlousy investmentis it true? high down paymentonly refinance if it payslife insuranceemergency fund Financial Cliffgrandchild summer job IRA contributionsocial workgrandparent IRA contribution do you need life insurancecompare monthly expensescharges on credit cardFinancial Awareness Video Festivallower interest ratepay down car loancontribution CD's2017 TaxesFree Debt EliminatorFinancial AwarenessFinancial Power of Attorneymake saving a pleasurecollege graduateinsurance yearly reviewCPI-Wdebt freekid borrow firstbreakdown projected monthly housing costWillBankruptcybuy homeallowance30 year mortgage car loanincrease emergency savingsterm insurancepay off debtpositivemanage student loansyours, mine & oursExhibitionHDHP GiftsFinancial Advicelower premiumMoney Market8 month emergency fundget health insuranceinsuranceincrease retirement savingsfocus on new truth 740 credit scoreSpendingstandard rateStudent Debt CrisisInfluentialsbad decisionshigh premiumshome loan credit score below 740 Fiscal Responsibilityschool valentines dayvalue moneyinterest capitalizationjanuary billsdeath benefit needs for familygraduationage appropriate goalswaive home inspection bidlong-term care Save Us MoneyEmployer Matched Contributionlow credit scoresocial securityStudent Debt20 year level term home budget after tax costChanging Livesstudent loan repayment planLTCi ASAPdangerous retirement planFederal Stafford loanget credit card40% toward financial goalpowerfulleave a legacyLong Term Care shoppingco-sign financing car Retirement SavingsCivil Rightsdebit cardSuze changed my lifepublic service loan forgiveness programshorter payback periodPrime Rate Rise 2015rising home pricesPost-Divorceinsurance mistakeFederal PLUS loanFinal Goodbyefull retirement agesuccesscredit reportdo not pay allowance for good behaviorunder 18 financial giftHDHP'sborrow each year, capitalization is going to pile up retain separate credit cardsPBS Specialconsider roth 401(k)compare provider pricingHDHP's are good for youbetter termsFRAloved ones dependent on incomeSuze Orman!00% tuition paidmonthly benefit cut monthly cellular billHigh FICO Score = Better RateYoung Adult take actionpaid in fulldeath benefit 20 to 25 times annual incomedon't buy wantsdon't do five year car loanteach your child good money habitsno late fee mortgage brokerAdequate Auto and Home Insuranceteens and moneySchool of Social Workincrease retirement contribution rateinitial tax break loan no longer than 36monthsbe kind to yourselfRichsecured carddon't defer interest paymentsbad retirement planningCredit Card Rate Increasefinancial fearsPrime Rate Increasestudent loan repayment estimatorenjoy saving would you decline a bonusRevocable Living TrustStudent Loanidentity fraudrent vs buyAmy Lacyetalways use all paid time off2016 adjust estimated taxat worst still pay 75% benefitclosing feeshealthy youInvest for savings growthpeace of mindRetirement Incomeautomate student loan paymentspercentage of women widowed 75-84ForbesCNBCHoliday SeasonFederal Funds RateMost Influential Celebrities Listretirment savingsconfident of solutionretirement plannot gender specific Personal Financeno tax on withdrawlsrequire chore in exchange for allowanceraise your deductiblebecome member learn good financial choicesFinancial Educatorbuy home you can affordlow mileage discountinterest on student loansCommunication Skills retirementcost of capitalization calculatorARMgift not loanmax employer matched 401(k) contributionmarriage financial responsibilitydon't ignore open enrollmentsame sex marriage band end Florida3 savings buckets verify wellness screening and programsSuze Orman Scholarshiphigh deductible health care plancredit union10 year repayment plan family save at least $100 monthlypay high rate off firstpay more than minimum20% equityresponsible with moneyno fee transferhealthy retirement blood pressureFinancialHeartrepay student loansmental healthcredit managementno retirement funds for down paymentpurely financial standpointno waiting periodworst financial mistakeSandy Hook Promiselow down paymenthome related tax break bonus 3% debt transferred be good exampleForeclosurederailed planchildren's bookrolloverstudent loan repaymentFICO ScoreOverspendingwives should be involved in retirement3 bucket approachlower ratehome insuranceHolidayRoth 401(k)Suze is my biggest mentordon't cover cosmetic dentistrypermanent life insuranceTeachstandard deduction provider of financial supportraise deductiblesHow To Build CreditAARP Social security calculatorFHA loan feesmortgage interest tax deductioncomparison shoppingMinor Children SelectQuote.comproperty taxclosing disclosurestore credit cardsanticipated salarySuze Orman spouse Kathy Travistitle insurancetoo expensive schoolbuying a car401(k) Contributionsaffordable premiumraising interest ratespay interest while in schoolUrbana-Champaignno private loanstaycationhealthy teethFICO at least 720Death Benefitreal estate market20% down payment avoid feescut monthly cable billreal estate mistakesrequired disclosurepay credit debt ASAPsetup automatic savings withdrawbetter loan ratescan you afford ittraditional vs roth 401(k)meet monthly Combo Insurance Productsno splurge incentives for health care wellness screeningsocial security not going brokehigh credit score discountForbes Top 10lowest cost fund optionHSA tax savingsis it kind?Veterinary SchoolPay Off Debt Before Retirementadjust allocations women live longerdental insurance advice for college graduatesavoid burn outLTClive below your meansprotect your familymax employee matchtelevision hostAuto Savings no negativitypreexisting condition not covered8 RulesAccuQuote.comoverspend on giftsCommencementbuy down Fundsmultiple lendersmortgageuniversal college accessgift up to 14,000Goodbyecar leasingLoveUniversity of Floridaemployer offered life insuranceFICO credit score credit card mortgagereferrals annual cost of living adjustmentretirement accountszero rate transfer dealsexercise reguarlyMass Mutualdoctor no longer in networkknow before you owedon't charge a pennyMortgage Credit Availability Indexdear suze401KWashingtonhome buying seasonface your financial fearlower overall drug costincreased auto insurance premiumhome buying budgetdream schoolorigination feesopen enrollment review overspend on dining outsummer job match income lower mortgage interestback door Roth IRA15-year refinance dealkids schedule paymentsloan necessity10% donate to charitylong term goalHigh Credit ScoreTelepicturesETF'srefundget the most out of social security Credit scorecredit cardwomen outlive menBankUS Tax Code2015 record year car saleshome buying mistakespremiumfour steps to retirement savings loan is gift20 to 25 times annual incomeMust Have DocumentsplanSwap Older Annuities or Life Insurance Interestno sneaking in fees20% down paymentnot enough life insuranceHDHP's are not badburn outcommitNewtownprotect loved ones COLAInfluential Celebrityfinancial goal phraseUniversity of IllinoisAlarm ClockMoney19 years cash flow problemtaxesemergency fund savingscontribute household expenses public service career student loan repayment save Americans don't use all paid vacation timedon't use allowance as bribeidentity theftStock InvestmentsAshley Springergift grandchild IRA contributionThe Suze Orman Showbudgetcollege studentsocial security never insolventVital Documentsautomatic withdraw to savings ignore 6 month grace period Financial Systemkeep a scheduleInflation Benefitlet them have 50% controlchildren under 18small changes point cost offset by savingshigher monthly paymentcostly insurance mistakeAARPGay CouplesHoliday Shoppingdebt3 step financial road maphighest possible benefitraising mortgage rates Lifestylepay down student loan debtJose Rodriguezfinancial argumentsreplace permanent life insurance with termfocus on needsswitch to roth 401(k)protect dependent community bank8 month safety nethealthy gumswomen longer life spanWarner Bros Television GroupSandy Hook Elementary Schoolterm life insurancepaying for collegeCredit Card Interest Rateeight month living expense no interestcouple financesMotherhigh FICO scoresavingsGraceone credit cardraise insurance deductibledental savings planDurable Power of Attorney for Health Carelong term careSuze Orman's Money WarsEasy Life Insurance workaholicLegal GuardianWall Streetcredit utilization rate6 month waiting periodborrowing plan escrowquick closingno life insurance financially irresponsibleteenslong-term care premiumsmoney vowsstrained relationshipspring summer Giftmaintain standard of livingroth iranon conventional routeBill and Pennybig results 15 year mortgagehigher insurance deductibleallowance taskemotional stakesadd teenstudent loan debthousing marketjuggle multiple financial goals2016 adjust withholdingdepreciating asset Marlo Thomasnew carspeak new goalcommunity collegedental discount planbalance transfer special saving accountStaffords this year have a fixed 6.8% interest ratereduce interest rateCollege of Veterinary Medicineapproved medical 100% tax-freeunexpected expensestretch out haircut appointments50 over 50three year car loanEric Dodge mobile appheartachetax refund fraudlife insurance name trust as beneficiary4 Must Have Documents 2015 financial roadmapBeautyMoney-SavingFixed Rate Mortgagepercentage men widowed 75-84doctors in networkhome ownershipfile taxes quicklybest loan deal Conventional loan PMIBaby Boomersverify retirement plan with HR or plan sponsorshop online guaranteed level term policyfile asapfinancial aidis it necessary?


View Blog & News List
People First. Then Money. Then Things.
Connect with me on Facebook Connect with me on YouTube Connect with me on Twitter
© 2017 Suze Orman Media Inc. All rights reserved.
 
 |  Search  |  Sitemap  |  Privacy  |  Terms
Sign Up For E-mail Offers
Open Panel
Close Panel