The Future of Social Security – Will It Be There For You?

Future of Social Security

By K. Bridget Schneider, CFP®, CRPC®

future of social security

There have been many articles written recently about the future of Social Security and its ability to continue paying benefits.  Projections show that in a year or so Social Security will need to draw on its trust fund to make payments to retirees.  Talk of the trust fund being depleted may cause you to question if Social Security will be available when you retire.  And should you prepare for a future without Social Security?

The Worst-Case Scenario

Social Security was created in 1935 and has been providing a retirement income to qualifying individuals since 1940.  It was originally designed to provide less than half of your current income. But there are some people that depend on it for most of their retirement income.  If nothing is done by our legislators, some estimates show that the trust fund will be depleted in 15 years.  At that time benefit payments would need to be lowered by 20% to 25% to continue payments to all beneficiaries.  So, while a benefit stream could continue, that reduction would be devastating to many households.

Increases to the Payroll Tax Rate

If benefits aren’t cut, then tax revenue for the program will need to increase. One way to do that is to increase the payroll tax rate.  Another option is to raise the level of earnings subject to taxation.  In 2019 the wage limit subject to payroll taxes for Social Security is $132,900.  To help the trust fund remain solvent, that limit would probably have to be much higher or removed entirely so that all income would be subject to the payroll tax.  This change would only affect people whose earnings over the limit currently avoid the Social Security payroll tax.

Increasing the Full Retirement Age

Increasing taxes isn’t popular, so Congress may be more likely to raise the full benefit retirement age to help secure the future of social security. That means younger generations will have to work longer before they can start collecting benefits.  It wouldn’t be the first time this has happened.  Changes made in 1983 caused the full retirement age to gradually rise from 65 to 67.

Lower Cost-of-Living Adjustments

Another change to help the future of Social Security might be to lower the Cost-of-Living Adjustments (COLAs).  These COLAs are based on the Consumer Price Index and allow for a slight increase in benefits to help keep pace with inflation.  If COLAs are lowered, benefit checks won’t increase as much as inflation does.  However, people who depend heavily on Social Security may need to find ways to lower their spending to make ends meet.

What Can You Do?

If you’re currently in the workforce, you may wonder how the future of Social Security benefits will impact your plans for retirement.  Luckily, one way to offset a lower Social Security benefit can be found in the workplace.  Check out the linked information for two ideas below.

Besides increasing your retirement savings options, it is also important to understand your Social Security claiming options.  There is no perfect strategy, but utilizing options such as waiting before taking your benefits can help you get more out of Social Security.

Preparing for the Future

While the future of Social Security is yet to be determined, a good retirement plan should consider both the knowns and unknowns.  You can take steps now to offset the risk of a reduction in Social Security benefits.  If you have doubts about your retirement planning, I suggest enlisting the help of a CFP® Professional.  By working with a qualified financial advisor to develop an effective strategy, you may achieve a comfortable retirement without depending on Social Security for most of your income.

As your friendly financial guide and ally, we can help you review your investment strategy, understand your claiming options for Social Security, or structure a retirement plan that makes sense for your unique situation.  For more information on financial and retirement planning, visit our website today, call us at 217-605-8130, or click here to schedule a free, no obligation consultation.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual, nor intended to be a substitute for specific individualized tax or legal advice. 

Follow us on social media for more tips on financial planning.

 Facebook Connections Financial Advisors     Twitter Connections Financial Advisors     LinkedIn Connections Financial Advisors    YouTube Connections Financial Advisors

Recent Posts

4 Ways A Small Business Can Benefit From a Financial Advisor

By Joe Globensky, RFC® As a financial advisor and small business owner, I know firsthand how my knowledge and experience has helped our company.  But if you have your own small business, you might not realize the value a financial advisor can...

Ways to Raise Financially Savvy Kids

Whether we admit it or not, money plays an important role throughout our lives.  Learning how to responsibly and smartly handle money is necessary for our children’s future financial success.

What Is Cash Flow and Is It Important?

Cash flow is the movement of money into and out of your household.  You will either have positive cash flow or negative cash flow depending on if you have more money coming in or more money going out.


Office: 217.605.8130
Toll-Free: 844.305.7670
Fax: 217.666.4188

604 N Union St Ste 1
Lincoln, IL 62656

Email Us


Sign up to receive the latest news, tips, outlooks and more:

Where are you located?

We are located in Central Illinois in the town of Lincoln. We also have an office in Plano, Texas. We work with a national clientele and will be happy to serve you.

Can I learn more about your services?

Sure. We advise clients on investment management, retirement planning, and other financial matters to help manage what they have. Because, many people save and invest, but they aren’t really sure they’ll have enough assets to be comfortable and do what they want in retirement or later stages of life. We show them whether they are on target or not. We can help you, too.

Would you like a no-cost, initial conversation to learn if you’re on track?

Yes, Thanks.