3 things that could help put Social Security back in the black

If you think you can count on Social Security to prop up your retirement than the joke may be on you. The news media’s been so busy covering President Trump 24/7 that a really big story slipped through the cracks this summer: Social Security will begin paying out more than it takes in by 2021 — just three years from now, and come 2034 or so — just 16 years away — payouts could be slashed by about 23%, unless tough steps are taken to bolster the rickety program.

Based on a projected U.S. population of about 370 million in 2034, that would mean drastically smaller checks for some 87 million Americans, the trustees estimate. How small? Try $5,969 a year in today’s dollars, according to the Peter G. Peterson Foundation, a think tank that focuses on fiscal matters.

That’s nothing less than devastating for the estimated 60% of retired Americans who rely on Social Security for at least half their monthly income.

What’s going on? You can read the whole government report here (if you like long, dense, boring bureaucratic language), but you probably know what the problems are; they’ve been obvious for years.

The retiree population is soaring. Baby boomers (American born between 1946 and 1964) are retiring in droves — an estimated 10,000 a day. This is expected to continue through 2029 or so.

We’re living longer. Overall life expectancy in the U.S. was 78.8 years (76.3 for men and 81.2 for women). That means more people are receiving benefits for longer periods. Sidebar: these life expectancy figures actually fell slightly in 2015, the first drop in decades, but researchers think it may be just a one-time blip.

There aren’t enough young people paying into the system to support Social Security. Right now, every person receiving Social Security is supported by nearly three workers. This will decline to two workers by 2034 (Social Security is financed by payroll taxes). In 1970, it was about four workers.

This triple squeeze means one thing for future Social Security recipients: big-time financial pain. On top of other difficult realities — like the fact that only about one in eight Americans has a pension, and that close to half of all families “have no retirement account savings at all,” it suggests that for millions of Americans, the “golden years” will be anything but golden. The sad fact is many may not be able to retire at all.

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