SOCIAL SECURITY'S FINANCIAL FUTURE

If Social Security income is a key source of your retirement or disability income, you need to know the financial health of the Social Security trust funds.

There are actually two trust funds that pay benefits:  the retirement or pension trust fund and the disability trust fund.  Together, they are called the combined trust fund.

Social Security has just released the financial report card for these trust funds.

The Disability Trust Fund (DI Fund) is projected to deplete it's resources in 2032 (just 14 years away).  After that date, however, 97 percent of benefits would still be available through current FICA tax income.

The combined fund is projected to become depleated in 2032, with only 79 percent of benefits payable after that date.

This assumes, of course, that no action is taken by the government to change course--such as higher withholding tax, increase in the eligibility age for retirement benefits, etc.

Social Security has asset reserves totaling $2.89 trillion as of 2017 with an annual increase of $44 billion in 2017.

The financial health of the disability trust fund depends partly on how many people file new claims in the coming years.  For the first time in ten years, new claims actually declined slightly in 2017.

Also, Social Security has tightened the screws, making it increasingly more difficult to get new disability benefits.  Ten years ago 69 percent of claimants who appealed their denials were eventually paid benefits.  Today, that percentage has dropped to about 42 percent.  That's based on national averages.

Factors that continue to force approval rates downward, I believe, are as follows:

1.  Social Security's obsessive fear of fraud.  Talk to any government official, elected representative or Social Security employee, and fraud prevention is the first thing on their minds.  That's one of the reasons it takes 2 or 3 years to get approved.  And that long waiting period is by design.

2.  Social Security's declining trust fund and the projected future difficulty in making benefit payments.  It's belt tightening time.

3.  A media assault.  The media constantly shell us with the message that Social Security is "the new welfare," that fraud and abuse is rampant, and  Social Security is giving away trillions of dollars to persons who don't deserve it...etc., etc.  Politicians and bureaucrats fight back by making it slow and very difficult for qualified and deserving claimants to collect on their I.O.U. from Social Security.  The waiting times have become obscene and, honestly, Social Security could significantly reduce waiting times if they really wanted to.  They don't.