With Donald Trump now in office, there are a lot of people approaching retirement who are concerned about the state of Social Security. With Mr. Trump initiating drastic reforms in other areas of the government, the fact that Social Security is underfunded has many current and future retirees concerned their benefits might be reduced at some point.
Social Security is a huge component of most Americans’ retirement plans. And while I consider myself pretty well versed in the system, I decided to bring in a subject matter expert for this post. Ben Brandt, of Capital City Wealth Management, was kind enough to share his time and shed some light on the matter. This post is a quick update of the current status of the Social Security fund, as well as Ben’s insight on what reforms are currently on the table.
The Current State of Social Security
We’ll get to my interview with Ben shortly. For some context, let’s take a look at the current state of Social Security. Every year, the Social Security fund’s trustees are required to issue a report on the fund’s financial status. Each report includes data on the fund’s current assets (cash) and liabilities (retirement benefits payable). They also include long term projections based on demographic data and a bunch of other variables.
The most recent report claims that the Social Security trust is currently taking in more revenue through payroll taxes than it’s paying out in benefits. It projects this to be the case through 2019.