Be prepared for lower benefits and higher taxes?

Have you been following the rumored demise of Medicare and Social Security? Sure, there are reform plans in the works, but there are still huge government deficits and no one seems to be quite sure how we, as a nation, are going to bounce back and fix our government programs. When politicians are talking about numbers in the trillions, it’s just too much to imagine. On top of that, what is happening to the stock market, and how is your portfolio going to handle the future? Can you even count on Medicare and Social Security to be in your future?

While numbers in the trillions are being thrown around, one thing seems for certain: Lower benefits and higher taxes seem to be the only way to fix the trouble we are in. While no one wants to see either, everyone wants to keep their benefits and prosper in the future. Unfortunately, this seems like the price we have to pay.

Believe it or not, Social Security was only created in 1935, during the Great Depression. Since then, it has been a significant source of income for those hitting the retirement age. Unfortunately, it is a system that is ‘pay as you go’, which means what you are paying right now out of your paycheck is going to today’s retirees. It is being spent and the workers of the future are expected to pay your benefits if you are expecting them 20 or 30 years down the road.

As it stands, there is a small surplus being brought in today as a trust fund, but that is expected to change around 2017, when the amount of benefits being given, will surpass the amount of profit that is able to go to the trust fund of the future. There are way too many boomers on their way to retirement and even though we have a trust today, that is expected to be gone by around 2040.

It may seem like that is a long time away, but it is arriving in only 32 years. If you are a boomer, there is no need to worry. Boomers will have benefits, but will the future generations have benefits? No one can say for sure. They probably will not have Medicare, unless some huge changes take place.

There seems to be a few solutions: increases in retirement ages, a slow reduction in benefits, and a slow increase on taxes for everyone.

Be prepared for all of the above.





For information on Social Security Disability, visit the

Social Security Disability Benefits Resource Center