Social Security Could Be In Worse Shape Than We Thought

Social Security is the backbone of retirement planning in the United States. Nearly one-third of retirees receive almost all of their retirement income from the system and nearly two-thirds receive more than half of their retirement income from Social Security. In short, America’s retirees need Social Security. However, it is not only retirees that rely upon Social Security. The Social Security Disability Insurance Trust Fund provides benefits to disabled workers, their spouses, and children. In December 2014, nearly 11 million people received Disability Insurance from Social Security, with an average benefit of roughly $1,000 per month. While the Old-Age and Survivors Insurance Trust Fund, the portion of Social Security that most people think of as their retirement benefits, is not set to run out of money in the trust until 2033, the Disability Insurance Trust will run out in 2016 if nothing is changed. This shortfall would result in a nearly 20% cut to benefits, reducing those $1,000 checks down to $800 a month. The acting commissioner of the Social Security Administration, Carolyn Colvin, recently stressed the importance of the situation when she stated “I don’t want to be dramatic, but I’ve worked with this population my whole career. I think we give them a death sentence” However, some of the proposals coming from Congress and the current Administration would provide only temporary relief, again delaying any solutions to the real funding issues with Social Security.