President Roosevelt first established Social Security in 1935 as a safety net for those in retirement. However, its demise has been anticipated for years with many sounding the death knell with greater urgency. These monies, which now take many forms, including but not limited to SSD, SSI and longer-term disability, are an important factor in keeping a roof over the heads of those in need. Pennsylvania residents who depend on these payments may be relieved to hear that the program should be around for the long term.
A recent review of the program's financial stability reveals that, while many congressmen have declared the system nearing insolvency, that does not appear to be the case. The program still has a budget surplus and has managed to increase revenue. There is a gap of approximately 0.3 percent between growth and payouts, which translates into a significant amount of money when working with sums in the billions of dollars. However, the overall balance is an estimated $2.85 trillion.
As of 2016, the growth in revenue was slightly ahead of benefits, but it did require a flow of interest payments to ensure that the balance for the fund remained in the black. At the rate for which benefits are anticipated to increase, even an influx of interest payments will not keep the current system sustainable, and it would run out of money by around 2034. However, if changes are made in several areas, the program will be around for years to come with minimal negative impact.
There have been suggestions concerning ways to secure the funds, such as cutting some benefits, changing the way the funds are invested, and tweaking both retirement age and tax rates. As long as measures are taken sooner rather than later, these benefits should continue to play a vital role in the lives of those who count on them. Pennsylvania residents who are having difficulty either applying for or receiving SSD or other benefits to which they are entitled, can seek the assistance of an attorney who is knowledgeable about how the program works.
Source: Fox Business, "The Death of Social Security Has Been Greatly Exaggerated", Dan Caplinger, Feb. 10, 2017