Social Security and the major changes that are now being discussed to this very important program that sends out monthly benefits to millions of beneficiaries. I have all the details for you in this video. And so I can keep you updated each and every day during this very busy time as information continues to change very rapidly. Right now, I’m watching it all closely and I’m doing all the research which I break down into these short videos so that you can get the latest details hot off the wire each and every day. So again, thanks so much for visiting our site.
All right So as all of us know, there has been a lot of different changes and a lot of discussion about Social Security over the last year or so. We’ve seen multiple different proposals. We’ve seen all these different ideas. We’ve seen all of these different concepts hitting the table as of recently on how they want to change this program. They want to boost benefits, adjust the way that the Cola raise is actually calculated each year.
They also want to do other things to the program, including increasing the solvency, among so many other things, for many more years to come. Well, as of recently, this year in 2022, they also changed the FRA, the full retirement age up to 67. Well, this is supposed to be the last time that they were going to be changing the full retirement age. Now, remember, if you are somebody who is 62, technically you can start drawing on Social Security benefits as early as 62. However, your benefit will be significantly less than if you wait until your FRA full retirement age.
However, now this year that they raised it up to 67, this is supposed to be the last time that they were going to be raising the FRA. However, just like so many things, they tell us one thing, and then sure enough, they come back out and a little while later, they change things up. Well, this is not going to be an official thing quite yet. However, there is discussion now that yes, as we’ve all been talking about for so many years, realistically, we’ve been hearing about this for 20, 30, 40 years. Social Security is broke, Social Security is bankrupt, and everybody is going to lose their benefits.
Well, that’s actually not the case. We’ve been hearing this for a very long time. Right. I know that when I was a little kid, you know what I mean? Like a long, long time ago. I’ve been hearing this basically my whole life. Social Security is broke. It’s going broke. Well, here’s the deal. That’s actually not the case.
In fact, as of right now, it’s reported that they have $2.9 trillion. I’m sorry, but $2.9 trillion is not broke. I mean, that is a ton of money. Seriously. That is a massive amount of money that they have.
And realistically, this program is going to be totally fine for a very long time. However, there is no discussion of possibly looking at Social Security, because realistically, even though this program is totally fine for a very long time, it does have some major headwinds in front of us, mostly of which we know this much. The money that is coming into Social Security right now through payroll taxes is less than what is actually going out. Therefore, it has like a slow leak. Right.
Maybe you have for example, let me just break this down for you as a quick example here. Let’s just say that it has $100 going into the program each month from payroll taxes, and it has $110 going out. Right. So it’s a very slow leak. Now, obviously, there’s a lot more than $100 going in and out each month.
I was just using that as a quick example to better illustrate the whole analogy of what is actually going on with Social Security. There’s less money coming in than what is actually going out. Therefore, over a long period of time, this program eventually will deplete the trust funds and whatever they have set aside. Right. The two $9 trillion.
So anyway, that’s kind of beside the point. But a lot of lawmakers are coming out wondering, what can we do about Social Security? What can we shore up this program just like we’ve seen with the Social Security 2100, we’ve seen with the plan out of the President, as well as the plan out of Bernie Sanders and a variety of other lawmakers? There are many different proposals out there right now to actually fix up Social Security and do a lot of things to this program to make sure that it is solvent for many more generations to come into the future. In fact, Bernie Sanders plan alone, his plan, wants to make Social Security solvent for over 50 more years.
Well, that helped out a lot of generations. Right? Well, as a result of that, they’re talking about and they’re discussing many more ways that they can actually make sure that this program is around for many, many more years to come. And when I say many years, I’m not talking five years, ten years, I’m talking decades. Right.
5100 years, something like this. So that basically anybody doesn’t need to worry about their benefits either being cut, reduced, things like that. However, now that we’ve talked about the FRA, the full retirement age, the discussion out there now is yet again. Hey, life expectancies are actually increasing. Right.
So the average person out there is living longer these days than what we were ten years ago, 20 years ago, 50 years ago. The life expectancy of us in the United States has increased significantly here over the last several decades. Well, as a result of that, they’re also anticipating, well, if life expectancies are also increasing, maybe we should also increase yet again the FRA, the full retirement age up to 70. So, yes, again, just like a sports analogy, like a football analogy, basically, they continue to move the goal posts. Well, it’s kind of hard to ever get to the end goal when they keep moving the goalposts.
Right. Well, now this is the new discussion out there right now saying, well, going forward into the future, this program does have some major headwinds. We have a couple of different approaches here as far as how we can actually approach this. Number one, we can raise revenues, which honestly would probably be the easiest way to do it. Nobody probably wants to pay more in Social Security taxes, but realistically, that would probably be by far the easiest way to do it.
As of right now, the employee. So you probably remember this when you look at your pay stub, right. For all the years that you’ve worked, whatever you get paid a weekly basis, a monthly basis, a biweekly basis, whatever it is, you look at your pay stub and you pay all that taxes to Social Security, right? Well, you’re paying half of it and your employer would be paying the other half of that. Well, again, that would be the easiest way to do this if they wanted to increase solvency of Social Security for many more years to come, a simple tax increase, even though probably not too many people enjoy paying those taxes.
It’s a pretty hefty tax. But realistically, that would be by far the easiest way to do it. So that’s what they’re saying is either one, we could raise revenues by obviously increasing the tax rate. Right. Even just a quarter of a percent, a half a percent, 1%, something like that, although it would translate into more dollars out of everybody’s paycheck, it would result in a lot of money throughout the course of the year through everybody paying in more and more.
Now, the other option would be and this would be a nondesirable result would be to reduce the amount of benefits. So they’re looking at the situation saying, okay, we’ve got two approaches here. We can either raise revenues by raising taxes or we can actually reduce benefits. Which one do we want to choose? Well, I guess look at it this way.
Which one would actually result in the least amount of backlash, raising taxes, a quarter of a point, maybe half a percentage point, something like that. And a lot of people would probably be upset. But at the same time, can you do anything about it? Well, no, you can’t get out of taxes. And if you do, you’re probably going to find yourself in a place that you probably don’t want to be right.
So here’s the deal. That’s one way they could do it or they could reduce benefits, which again, is not exactly a desirable result, especially when there are vast when there are a lot of people out there who are actually relying on Social Security benefits as a major portion of their retirement income. In fact, about 40% of retirees actually rely on Social Security for 90% of their income. In fact, I’ve seen this down below in the comments section over the last couple of years here that we’ve been talking about this. I’ve seen a lot of you down in the comments section saying, my Social Security, my retirement benefits, my SSDI, my SSI benefit, my VA benefit, whatever kind of fixed income benefit you’re talking about.
I’ve seen it many times for a lot of well, for the last couple of years now, many people reaching out saying, hey, my Social Security is my only benefit. If something happens to this benefit, I have no clue what I would do. This is my only income. This is a very important program. So this is one thing that they’re discussing right now is potentially raising the full retirement age.
However, now I know a lot of you might be wondering, okay, well, I’m already receiving Social Security benefits. Does this mean that my benefits will be reduced or stopped or anything like that? No, it would not mean that at all. So basically, it would just mean for those people who were born, what was it after 19 or after basically, then the full retirement age would be raising for those individuals. And again, usually it extends out the full retirement age.
And then basically whenever you hit your age limit. So 62 and two months, 62 and four months, things like this, it’s usually in two-month increments. And then you can start drawing on your benefit. So this is something that would again, push out the goal posts for a lot of people. But if you’re already receiving benefits, there’s nothing for you to worry about.
This would be for those people who are maybe leading up to the ages of early retirement, 62 of these ages, and then basically they push out that the full retirement age for who knows, maybe they go to 68 or 69 or 70 things like this. But these are some of the ways that they’re actually considering to actually increase solvency of this program is they’re basically looking at the program, like I said a few minutes ago, is there’s less money coming into the program than what’s actually going out from the program? With life expectancies moving up, as in we’re living a lot longer. They’re saying this is adding additional strain to the program because more people are drawing on benefits and the program simply does not have enough revenues coming into it. So here’s what’s good about this.
Yeah, it’s a long process. It’s a thing that’s going to take a very long time. It will take congressional action. They will need to walk this through Congress. They will need to change this through Congress.
It cannot be done through executive order and it cannot be done through reconciliation. It has to be done through bipartisan support through Congress. The dreaded words. Right. The dreaded words being bipartisan action through Congress.
Does that ever happen these days anymore? Well, it does every so often. But for the most part, Congress has kind of a hard time working together on a lot of different issues. But here’s one of the major nice things about this whole program and this whole thing going on right now is they do have about eleven years or so until some major things may be coming down with Social Security. Now, don’t get me wrong.
I know it’s eleven years from now when we could potentially be looking at a complete insolvency issue with Social Security. That’s a long time. Eleven years. But the fact is it also takes Congress a very, very long time to work their way through this. And at this point, it may not be on the front burner for Congress to actually start working on simply because of that massive timeline that we have about eleven years to get this done.
But they’ve got to start taking action on all this stuff now because again, let’s just say, for example, that they raise the payroll tax. Right. The Social Security payroll tax like I discussed a minute ago, if that’s the case, let’s just say that they raise it by, I don’t know, 00:20. 5% if that’s the case. And if everybody starts paying in an additional 00:20.5% in payroll taxes through Social Security, it’s going to take a very long time for that trust fund to continue to be built up, right. If you’re paying an extra, say $2 every week or an extra $4 every two weeks or an extra $8 a month per person, things like that, it’s going to take a long time to build up that cash hoard once again. Right. So it’s not like something we can do is just flip a switch and all of a sudden they got trillions of dollars. Once again, that’s not really how it works.
It takes a long time. There’s a very long lead time when it comes to building up these trust funds and making sure that there’s ample amount of cash available to pay out all of the promised benefits that we’ve been talking about and that we know for a very long time. So I guess choose whatever is best for us. Would we rather pay a little bit more today so that all of us can continue to get our guaranteed and promised benefits, or would we rather see a 22% or so percent haircut to our benefits in about eleven years? Well, I think all of us know the simple answer to that one, right.
Anyway, this is the information that I found about this specific topic. Of course, as I do get more information, just like anything out there, of course, I’ll continue to bring it to you and help you out in any way that I can as well as keep you updated as there is a lot going on right now, things are changing very rapidly. It seems like we continue to get multiple different proposals as well as ideas and all kinds of different concepts coming up about Social Security retirement benefits, SSDI survivors, SSI, VA, low income, low-income seniors, elderly people with disabilities. There’s a lot of different things that are happening out there. And realistically, it’s probably only a matter of time until Congress actually does something when it comes to all of these different proposals that we’ve seen out there.
So either way, my commitment to you and this community is to continue watching everything very closely as I do get more information. Of course, I’ll be right back here for you breaking it all down to help you out in any way that I possibly can. I hope this one helps you and I’ll keep you posted with everything going on. Enjoy and I’ll catch you guys.