What’s new with Social Security? An update

Robert Jeter, vice president of InFocus Financial Advisors

What many already know remains the same. The outlook for the future of the Social Security program as we know it presents a challenge on the horizon. While the outlook has raised questions for some time now, an important threshold was breached this year. The report said Social Security’s cost will “exceed its income for the first time since 1982 and remain higher throughout the projection period.” What this means is that asset reserves (trust fund) will have to be utilized this year.

What’s important to note is that benefits paid out have exceeded taxes coming in since roughly 2010. However, interest on monies in the trust fund covered the shortfall. This year, despite rising interest rates, that will no longer be the case. As noted in the report, this trend will continue through their projection period as a result of not only significant amounts of baby boomers retiring, but lower birthrates in the working-age population.

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