Name: Will you lose your Social Security benefits?
Uploaded: 2022-11-04
Duration: 4 min 8 s
Description: Less money is flowing into Social Security, Fortune senior reporter Megan Leonhardt explains, but the benefit is not going away completely. Here's how to prepare for potentially smaller payouts.

Less money is flowing into Social Security, Fortune senior reporter Megan Leonhardt explains, but the benefit is not going away completely. Here's how to prepare for potentially smaller payouts. 

Will you lose your Social Security benefits?

Finance

Less money is flowing into Social Security, Fortune senior reporter Megan Leonhardt explains, but the benefit is not going away completely. 

Less money is flowing into Social Security, Fortune senior reporter Megan Leonhardt explains, but the benefit is not going away completely. Here's how to prepare for potentially smaller payouts.

You've probably heard that social security is going to disappear by 2035, for at some point in the next couple of decades isn't necessarily going to run out, but we're going to end up having a shortfall. So most people may only be getting about 70-80% of the income that they were expecting. And that is a problem. A lot of people have this vision of Social Security one day suddenly it's gone. Nearly half of millennials don't think they're going to get a dime of Social Security. This is actually a big problem in terms of confidence. It is something to be concerned about. But it's not something that means overnight Social Security is going to disappear because Social Security is a payroll tax. You have people actively paying into Social Security every paycheck and that means that there is money coming into the pot that then can be distributed out to retirees that need it and there are some fail safes that have been put in. Unfortunately, those reserves are getting spent down today. If we do nothing, we could end up seeing that retirees could end up having their benefits slashed in order to make sure that everyone is getting a piece of that pot. So why is the security dwindling these days? And there are a number of reasons for this. The biggest is that people are living longer when we had security and it was originally income. A lot of people didn't live long after they retired thankfully modern healthcare better living diet. All of that means that people are living longer. That's great. It also means that we're paying out Social Security decades longer than we used to and that can be a little bit tricky when you put this into the equation. One of the other big issues that we have to face is that we do have a population in decline. Generally more people are dying than being born. You also may have a smaller workforce eventually that pays into Social Security, then you do a retirement force that ends up taking money out of Social Security. It's a balancing act that we need to make sure that we're keeping track of because of course this happens over decades when you're younger, of course you put money into security and then inflation hits and then the cost of living changes. And so by the time six decades later that you're taking that money out, it has to still make sense in able to give you something to live on all of these factors, make it very difficult to have those security work and work long term for today's very complex population. Social Security really hasn't had any major reforms in a number of years. And so if we do actually get legislators and lawmakers to implement changes that could redistribute some of these issues, then of course it could actually all be okay and there have been a lot of propose solutions over the years. Everything from reducing Social Security benefits to increasing the minimum retirement age. There are a lot of ideas kicking around but what we need is a really comprehensive plan at this point to make sure that we don't end up with a reduction of benefits for current and future retirees. So we not only need to think about solutions for Social Security in terms of making sure that everyone gets their fair share, we also need to do some education on our own parts. There are a number of calculators and tools out there that can help folks figure out if they are looking at a Social Security shortfall. You can also talk to a registered financial advisor or financial planner and really dig through what this means to you. Peace of mind means making sure that you're financially secure your entire life, including after you retire. If you're worried about how inflation or a market downturn may impact your retirement plan. Check out our next video to learn how it all works.