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A: Most plans do not reduce the benefits of currently disabled benefi- ciaries. However, without change, it is expected that the program will no longer be able to pay current benefits in full starting in 2033. At that time it is expected that only 75% of currently scheduled benefits will be payable.
Q: I’m 49 years old . If nothing is done to change Social Security, what can I expect in retirement benefits from the program?
A: Unless changes are made, at age 69 in 2033 your scheduled benefits could be reduced by 25% and could continue to be reduced every year thereafter from presently scheduled levels.
Q: Should I count on Social Security for all my retirement income?
A: No. Social Security was never meant to be the sole source of income in retirement. It is often said that a comfortable retirement is based on a “three-legged stool” of Social Security, pensions, and savings. American workers should be saving for their retirement on a personal basis and through employer-sponsored or other retirement plans.
Q: Does Social Security have dedicated assets invested for my retirement?
A: Social Security is largely a “pay-as-you-go" system with today’s tax- payers paying for the benefits of today’s retirees. Money not needed to pay today’s benefits is invested in special-issue Treasury bonds.
Q: Is there really a Social Security trust fund?
A: Yes. Presently, Social Security collects more in taxes than it pays in benefits. The excess is borrowed by the U.S. Treasury, which in turn issues special-issue Treasury bonds to Social Security.
Q: I hear that Social Security has a big financial problem? Why?
A: Social Security’s financing problems are long term and will not affect today’s retirees and near-retirees for many years, but they are very large and serious. People are living longer, baby boomers are nearing retire-
New Views About Retirement 5