Social Security benefits for senior Americans: Are they in danger? (Future predictions...)
According to the Social Security Administration's own website (ssa.gov), by the year 2035, there will be a shortfall in taxes that could cause programs like Social Security to cut back to 75% of scheduled payouts. However, I'm concerned about the roll-out of a "universal basic income" (UBI) system. Will it crush Social Security, and ultimately itself in the process? What should retirees and pending retirees (like me!) expect in the future? More below...
Below: Former U.S. Presidential candidate, Bernie Sanders, makes a solid argument that the wealthy should pay more than the dwindling middle classes do into Social Security to offset the future tax shortfalls that could force a cut in benefits.
On the homepage of ssa.gov (the American Social Security or retirement fund) you'll find the following warning:
"...Currently, the Social Security Board of Trustees projects program cost to rise by 2035 so that taxes will be enough to pay for only 75 percent of scheduled benefits. This increase in cost results from population aging, not because we are living longer, but because birth rates dropped from three to two children per woman. Importantly, this shortfall is basically stable after 2035; adjustments to taxes or benefits that offset the effects of the lower birth rate may restore solvency for the Social Security program on a sustainable basis for the foreseeable future. Finally, as Treasury debt securities (trust fund assets) are redeemed in the future, they will just be replaced with public debt. If trust fund assets are exhausted without reform, benefits will necessarily be lowered with no effect on budget deficits."
I was recently speaking with one of my clients who is about to retire. She was wondering whether she should start taking her social security benefits now, or wait a few months. While I'm not a financial expert (there are many on Youtube and of course your own financial advisor or accountant can give you the best financial advice), I did take the opportunity to look out into the future to see if there are any "red flags" that pending retirees, like me, should be on the lookout for.
First of all, I am a little concerned that within the next 12-18 months, the SSA could be strapped with some new rules and regulations for retirees that could bring eligibility into question, and slow down the whole application process. This may also slow payouts for a period of several months, which could delay retirement plans for a good portion of the elderly population. However, the program does NOT go away, and by 2026 (my early retirement year!) it looks as if the program is wide open again (perhaps to more than just American retirees**), and I would even expect benefits to go up as much as 50-70% in some cases!
**My concern is that this increase in benefits will also overlap with the rollout of a universal basic income (UBI) program. I can "see" that within the next two years, as the SSA's rules and regulations change, new people join that organization, and eventually convert it into some sort of UBI facilitator. UBI comes to "front and center" of the political scene by 2028 (this, incidentally, is the year that I see the rise of a digital currency).
And of course, the ultimate plan is to roll out a centrally-controlled, digital currency, but this initiative will be a miserable failure in the end. I do not expect it to last past 2031. However, I do "see" myself enjoying my retirement with the supplemental income from the USA for at least 20 years. Past that timeframe, I don't see it anymore, but that may be because I've crossed over, or I'm just comfortable enough to surrender citizenship.
There are a couple of take-aways from all of this and the first one is that if you're expecting to apply within the next two years or so, expect delays. (In other words, keep your day job or at least a side hussle that will pay your bills "just in case"). If you're on the fence about receiving your funds now, you might consider (with the advice of a real financial advisor) starting early before the system gets waterlogged with UBI payments.
Next, because I'm seeing the UBI advoctates come to the forefront over the next 2-4 years, this indicates that a far-left government will still be in control for longer than we would hope (versus a Trump-MAGA-type, free market government). My biggest fear is that we will have a one-term Michelle Obama presidency that will bring with it the digital currency...and perhaps even the release of a more powerful, lab-made virus by 2028...just to "teach us all a lesson".