What Are Your Rights? Social Security Could Be in The Red By 2035
Announcer: The following segment is sponsored by Martin, Harding & Mazzotti.
Man: The most recent version of the annual Social Security Trustees Report indicates that the total cost of Social Security will exceed income for the first time in the year 2020. The report goes on to predict that by the year 2035, the program will no longer be able to pay entitled individuals their full benefits. That sounds pretty ominous. So here to help us examine this issue is partner Rosemarie Bogdan from the law firm of Martin, Harding & Mazzotti. Hello, Rosemary, thanks for being with us today.
Rosemary: My pleasure.
Man: All right. So, as I said, this does sound a little ominous. What exactly does this all mean, this depleting of funds?
Rosemary: Well, essentially, we’ve built up an excess in the system over decades. And what the report is telling us is that by 2035, we will have depleted that excess, and we’ll actually be paying more out than the program is taking in.
Man: Still want to know, the first thought you have is, does this mean I’m not going to get my check when the time comes?
Rosemary: Certainly not now. As we get closer to that date, of course, there could be modifications in the age that you’re eligible for Social Security or potentially a diminution in benefits.
Man: All right. But there are some expectation the government will find a way to fix this between now and then?
Rosemary: Right. We could only hope so. And what I think the viewers need to understand is that what we’re dealing here is with demographics. We had the Silent generation, which was smaller than the Boomer generation, which was larger actually than the Gen X generation. So we always had a situation where it was a pyramid where the people that were contributing to the system were a larger population than the people that were receiving it.
But now with this Boomer generation coming on board to receive Social Security benefits, and the Gen X generation actually being smaller in size, you have more of an hourglass as opposed to a pyramid, and that can pose problems with the system.
Man: Got you. All right, so what do you do? You’re watching right now, what do you do between now and then to try to make sure you’re protected?
Rosemary: Well, certainly, you have mandatory Social Security contributions, right?
Rosemary: So, what can you do individually? Well, if your employer offers any type of retirement savings matching programs, that money that you can set aside pre-tax will really come in to benefit you in the future. Also, there’s retirement plans, insurance and all those things that you can try to do to protect yourself.
Man: I like it when you say matching, but that’s free money. If you got a matching plan, take the free money, right?
Rosemary: Absolutely. We at Martin, Harding & Mazzotti have a matching plan. And, certainly, you know, any employee that puts money in, they get the match. If they don’t put the money in for the retirement for themselves, they don’t. So it absolutely is money that’s available for people out there. Everyone should take advantage of it.
Man: Good advice. Thank you so much, Rosemary Bogdan. Martin, Harding & Mazzotti as always. Thanks for the advice. Craig, we’ll send it over to you.