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

FICO credit score credit card mortgagecar loanGoodbyedon't ignore open enrollmentultimate compounding giftcredit reportco-sign tax ID theftpay off debt401Kderailed planHigh Credit ScoreMotherNew York Life10% donate to charityCredit Card Rate Increasepercentage men widowed 75-84waive home inspection bidpaying for collegedon't blow tax refundCNBChome buying mistakesSandy Hook Elementary Schoolcredit utilization rateprotect loved ones grandchild summer job IRA contributionSelectQuote.comRoth 401(k)SatisfyingPersonal Financerefundmonthly dental insurance premiumpresident Obamais it necessary?Changing Livesdoctor no longer in networkcredit managementis it necessary8 month emergency fundsave strained relationshipLTC shoppingPrime Rate Increasedental discount planloved ones dependent on incomeIRA contribution gifted moneyFinancial Gift CliffFinancial CliffBaby BoomersRetirement Savingscut monthly cellular billanticipated salaryautomatic withdraw to savings Giftmax benefit coverednegotiate points with bank or seller20 to 25 times annual incomebest loan deal three year car loanBankno life insurance financially irresponsibleoverspend on giftspublic service loan forgiveness programfamily save at least $100 monthlypositivemaintain standard of livingno apologyRevocable Living Trustignore 6 month grace period learn good financial choicesonly offered while employed Cory Bookerdo not pay allowance for good behaviorbe kind to yourselfsavingscredit unionpay 100% cashwrite new goalface your financial fearearn allowance2017 TaxesAmericans don't use all paid vacation time6 month waiting periodadvice for college graduatescommit50 over 50mortgage disclosurelow mileage discountdebt freeretirement planreduce withholdingteach importance of helping othersFree Debt EliminatorStudent Debt Crisislower overall drug cost8 RulesSuze approvedBill and Pennycompare monthly expensesaffordable premiumHDHP'sHow To Build Creditcompare provider pricingdon't do five year car loanraise your deductibleback-to-school budgethome related tax break bonus emotional stakeshome insuranceMortgage Credit Availability Indexmoney vowsswitch to roth 401(k)always use all paid time offBeautydeath benefit 20 to 25 times annual incomedental insurance high deductible health care planEmergency Savingsprotect your familyteach your child good money habitswomen live longerlong term carecnbc alarm clockbetter loan dealsloan is gifthome ownershipFinancial Awarenessallowance taskAccuQuote.comwould you decline a bonusLong Term Care premiumslower rateCredit Card Interest Ratepoint cost offset by savingsreduce monthly paymentsavings pleasurelong-term care big results mobile appRetirement Incomestandard deduction 20% down payment avoid feesFiscal ResponsibilityHoliday SeasonEric Dodge Heartworst financial mistakehigh premiumsknow before you owesame-sex marriagecontribute household expenses COLAUrbana-Champaignrent vs buyFinancial Adviceno retirement funds for down paymentAshley Springerhealthy retirement weightshort term goal Young Adult housing marketmax employee matchInterestMoney Marketavoid burn outcredit cardexercise reguarlydon't cover cosmetic dentistryCredit scorepermanent life insurance2015 financial roadmapConventional loan PMIno tax on withdrawlsadult childrencollege studentlive below your meansDurable Power of Attorney for Health Carewomen outlive menhighest possible benefitFixed Rate Mortgageunder 18 financial giftpremiumsocial workhome buying budgetgrandparent IRA contribution reduce interest ratemental healthdangerous retirement planEasy Life Insurance Mass Mutualnew carproperty taxzero rate transfer dealsForeclosurerefinanceFICO at least 72020 year level term create new truthFHA loan feesannual cost of living adjustmenthealthy aging television hostmake saving a pleasureAARP Social security calculatorget over life insurance phobiabetter termsterm insurancespecial saving accountinsurancetraditional vs roth 401(k)do you need life insuranceUS Tax Codepay down car loanritual scheduledangerous money seasonsetup automatic savings withdrawpaid in fullfederal student loan deferment financial independenceretain separate credit cardsadd teendon't derail retirement savingscharges on credit cardgift not loansecured carddental savings planlower premiumlife insurance name trust as beneficiarybreakdown projected monthly housing costSchool of Social Workreferrals women longer life spanbudgetARM Cautioncouple financespay interest while in schoolFinancial EducatorForbes Top 10alternative FICO scoreraise deductiblescontribution Post-Divorceletter to suzehome loan credit score below 740 interest capitalizationrepay student loansback door Roth IRA20% equitydon't defer interest paymentsconfidentemergency fund savings2015 record year car salesschool term life insuranceretirment savingsautomate student loan paymentsno sneaking in feesunexpected expenselet them have 50% control3 bucket approachhealthy retirement blood pressurepaid vacationCommencementyours, mine & oursunsubsidized Stafford loanARMstudent loan debtdebit cardOne Wallet At A Timeno private loansecure credithigh down paymentSave Us MoneyUniversity of Illinoisvalentines daycar buying mistakesWashingtonno negativityincrease emergency savingsbuying car 2016increased auto insurance premiummultiple lendersreal estate marketno fee transferconfident of solutionverify wellness screening and programscollege graduateverify retirement plan with HR or plan sponsoridentity fraudsummer job match income juggle multiple financial goalsno splurge HDHP heartacheVeterinary Schoolcan you afford itstay positiveinsurance yearly reviewSpendingborrow each year, capitalization is going to pile up LTCi ASAPhome budget after tax costprotect and provide for minor child bill paying prioritiesrequire chore in exchange for allowanceiffy incomeStaffords this year have a fixed 6.8% interest rateGiftsbad retirement planningSuze OrmanAuto Savings Money-Savingdoctors in networkCPI-Wborrowing plan closing feessocial security never insolventnot enough life insurancebuy homeemployer funding HSAonly refinance if it paysFinancial Power of Attorneycar leasinginitial tax break teensCivil Rightsswitch to spouse coveragecomparison shoppingcost of capitalization calculatorForbesallowancepay more than minimumRichLifestyleinterest on student loansemergency fund Suze changed my life740 credit scorespring summer !00% tuition paidFederal Funds Rateplanbetter loan ratesStock Investmentswives should be involved in retirementTeachopen enrollment review Pay Off Debt Before RetirementgraduationHigh FICO Score = Better Rateovercome financial fearsresponsibleloan no longer than 36monthscostly insurance mistakemonthly benefit Communication Skills ETF'sOverspendingfocus on new truth speak new goalnear historic lowslowest cost fund optionbad decisionsreal estate mistakeshigh FICO score15-year refinance dealmoney-aware childlower mortgage interestlife insuranceThe Suze Orman Showtax refund fraudone annual feeFinancial Awareness Video Festivallousy investmentchildren's bookLoveMost Influential Celebrities Listage appropriate goalstake actionidentity theftitemized deductionSandy Hook PromiseMoneyFinancial Systemstudent loan repayment planGay Coupleshealthy yousocial securityadjust allocations Jose Rodriguezholiday spendingschedule vacationfraudulent returnreplace permanent life insurance with termtitle insurancePrime Rate Rise 2015employer offered life insurancesuccessroth irafinancial concernsidelinedstore credit cardscommunity collegeburn outWall Streetmortgage interest tax deductionprovider of financial supportbe true to yourselfleave a legacyFinancialescrowWarner Bros Television GroupStudent Loankids schedule paymentsdear suze2016 adjust estimated taxAlarm Clockstudenthigh credit score discountresponsible with moneycommunity bankphysical healthstaycationoverspend on dining outsave money8 month safety netlong-term care premiumsLong Term Care shoppingpowerfulpeace of mindat worst still pay 75% benefitHDHP's are not badAARPPhyllis Shelton expert long-term caredon't charge a pennyno interestchildren under 18increase retirement savingsretirementwomen long term careLTChigher insurance deductiblelow credit scoreprotect dependent age appropriate choreEmployer Matched Contributiondon't buy wantsworkaholicpay high rate off firstfinancial argumentsone credit cardAmy Lacyetbest interest ratesgift grandchild IRA contributionapproved medical 100% tax-freeSuze Orman spouse Kathy Travisclosing disclosurefile asapis it true? financing car social security not going brokedream schoolfile taxes quicklybalance transfer long term goalquick closingjanuary billsraise insurance deductiblerequired disclosurecalculate dependents annual income needsSuze Orman Scholarship20% down paymentbuying a carrising home pricespay down student loan debt3 savings buckets mortgagepublic service career student loan repayment marriage financial responsibilityNew american Dream FICO Scoreloan big picture shop online guaranteed level term policyHoliday Shoppingfinancial fearsincrease retirement contribution ratemeet monthly is it kind?debtkid borrow firstFinal Goodbyeautomatic paymentfinancial goal phraseInfluential Celebritydon't extend mortgage buy home you can affordNewtowndepreciating asset HDHP/HSAgift up to 14,000PBS Speciallow down paymentpay credit debt ASAP401(k) ContributionsSuze Orman's Money Warsfour steps to retirement savings College of Veterinary Medicinestretch out haircut appointmentsclosing costs 2% of loanno waiting periodconsider roth 401(k)Exhibitionstudent loan repayment estimatordon't spend student loan repaymentdon't use allowance as bribefull retirement agetaxesretirement accountsHSA tax savingsGrace4 Must Have Documents no late fee HolidayHDHP's are good for yourolloverSuze is my biggest mentorStudent Debtcut monthly cable billorigination fees3 step financial road mapkeep a schedule3% debt transferred 40% toward financial goal2016 adjust withholdingmortgage brokerInfluentialsMarlo ThomasCiti Simplicity Card max employer matched 401(k) contributionpreexisting condition not coveredFundsuniversal college accessFinancial Solutions For Yougay marriage ban end Florida same sex marriage band end Floridabecome member Adequate Auto and Home Insurancebuy down home buying seasonloan necessityTelepicturesUniversity of Floridapurely financial standpointGay Rights10 year repayment plan be good examplelow-cost index mutual fundenjoy saving get credit cardmarriage inequalitysmall changes death benefit needs for familyget health insuranceget the most out of social security overspend on nights outLong Term Care Insurance value moneystandard ratepush yourself to save more for retirementpercentage of women widowed 75-8419 years cash flow problemprescription tierincentives for health care wellness screeningnot gender specific Invest for savings growthinsurance mistaketeens and moneyFRAmanage student loansBankruptcyfocus on needs


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