Will There Still Be a Social Security Retirement System?
Q: I am a “30-something.” I dutifully pay my taxes, including the Social Security tax (FICA), every month. Am I wasting my money? Will there be a Social Security Retirement system when I reach retirement age or Disability benefits if I am unable to work?
A: Technically, this is a “political” question rather than a legal one, but I’ll tell you what I know. The Social Security Retirement program was the result of a bill enacted by Congress in 1935, 80 years ago. In 1956 the Disability program was added, initially only for workers aged 50-64. Your FICA taxes fund both programs. There are separate Trust Funds for both programs, though there have been frequent transfers of funds between the Disability and Retirement Funds over the years. You have heard about the possible insolvency of either the Disability Fund or the Retirement Fund, or both, if changes aren’t made soon. The rumors are true. If Congress doesn’t act, both funds could run out of money, despite the fact that you, and nearly every working person in the United States, continues to pay into the funds. The solvency problems are fixable and many smart people, including those in the Social Security Administration, have proposed solutions, some of which are quite simple. It will take political will, and an act of Congress, to put the ideas to work.