Friday, August 5, 2011

Will I continue to get my Social Security now or after I retire? Is Social Security safe?

On August 14, 2011, the country will mark the 76th anniversary of Social Security. Since it was first enacted, those who retired were able to count on the government providing much (or even all) of their financial support.

However, the recent debt crisis heightened awareness that Social Security payments may be in jeopardy. Thankfully, the bill that the Congress and Senate passed, and the President signed protects our citizens from future Social Security cuts should the newly formed bipartisan financial committee fail to make agreements.

During the past few years, a number of proposals have been raised that would change Social Security. President Bush favored privatizing it, meaning that our funds would be invested in the stock market. But, given the up and down volatility of the market, Democrats opposed this concept. Last year, in August 2010, President Obama recorded this message.

In the above video, the President vowed to keep Social Security safe and out of the hands of Wall Street. Thus far, he has kept his word.

However, many now realize that the Social Security Trust Fund contains no cash. The taxpayer dollars collected are used to purchase US Treasury bonds. This means that if the Government has fiscal or budget difficulties, then redeeming the bonds for recipient payments could be difficult.

The country is getting older, and with the Baby Boomer generation beginning to retire, there will be increased demands to redeem the bonds. Further, the poor economic climate and high unemployment rates are limiting the amount of new money that is entering the Social Security Trust.

Will you continue to get your Social Security payments?
Most likely yes!

However, Social Security, as we know it now, will have to change. When Social Security was created, the life span was shorter. Retirees were expected to live for only five years on average. Today, they will live at least three times longer.

To fund these payments, the government will most likely raise the retirement age for future generations.

In addition, they will limit the amount of increases that recipients get. This means that while your payments are safe, you cannot count on the amount that you may receive.


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