April 18, 2020

Social Security Needs YOU

Advisers are asked to advocate for the program’s reform.

Reported by John Manganaro

According to the most recently released financial status report from the Social Security Board of Trustees, the combined asset reserves of the Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI) trust funds are projected to run out by 2035.

Notably, that year does not represent the time by which Social Security assets would be wholly depleted. According to the Social Security Board of Trustees, approximately 80% of benefits would still be payable at that time. The board projects that the total annual cost of the federal retirement income program will exceed total annual income in 2020—for the first time since 1982—and remain higher throughout the entire 75-year projection period.

Given such figures, advisers should strongly consider adding Social Security advocacy to their political activities, industry leaders suggest.

“The anticipated depletion of the Social Security Trust Fund by 2035 begs the question, how will Americans retire? Comfortably and on our own terms? Or without adequate savings, putting pressure on families, the government and the economy?” asks David Musto, president of Ascensus. “That answer depends on decisions that demand action today. Though it lacks the emotional pull of a partisan soundbite, retirement security is a topic that both sides of the aisle agree needs greater attention and innovation.”

According to Ric Edelman, chairman and co-founder of Edelman Financial Services, as well as a vocal Social Security reform advocate, now is the time to address the program’s financial stability—“before it is too late.” Waiting longer to act will make any solution more challenging to implement, he says.

He proposes that advocacy start by simply addressing the misconceptions that exist among voters and the public about Social Security. For example, he points out that the program was never “self-funding” without the significant input of annual federal tax dollars. Current workers and employers pay substantial Social Security taxes—more than 12% annually between both groups—and their money is given to current retirees.