Written By: Anushka
Many are skeptical about Social Security, fearing they won't receive benefits. Recent projections of trust funds running out by 2035 have heightened these concerns.
The Social Security Trustees Report predicts trust funds will be exhausted in 2035, potentially leading to benefit cuts. However, this does not mean a total financial collapse of the system.
Payroll taxes primarily fund Social Security. As baby boomers retire, revenue may decline, but as long as the workforce is active, benefits won't disappear entirely.
Lawmakers are aware of the impact of cutting benefits and have historically intervened to prevent it. They understand the financial devastation such cuts could cause retirees.
While Social Security isn't going bankrupt, it should be part of a balanced retirement plan. It should supplement, not replace, other income sources like savings and pensions.
To reduce reliance on Social Security, save consistently. For example, saving $600 a month with an 8% return can grow to $526,000 in 25 years. Start early to maximize your nest egg.
Understand how Social Security fits into your financial future. Avoid over-reliance, but appreciate its role as a supplemental income source.