The majority of Americans are concerned that Social Security may expire in their lifetimes, and the pandemic has only increased their worries.
According to a poll conducted by financial services business Nationwide, 71% of individuals agreed with this statement. Gen Xers and millennials had the most concerns about the benefits programme, with 83% and 77%, respectively, while just 61% of baby boomers shared these views.
Additionally, 47% of millennials expressed the opinion that “they will not get a dime of the Social Security benefits they have earned.”
Social Security Financing Concerns
Following the start of the epidemic, many Americans (59%) feel they are more pessimistic today about the program’s financing running out. While 11% want to delay filing and 9% intend to file sooner, 19% say Covid-19 has caused them to reevaluate their intentions for claiming benefits.
The trust assets that Social Security depends on to make benefit payments have been depleted. In 2035, according to the Social Security Administration’s most recent official forecast, those funds might run out, at which point 79% of the benefits that had been promised would become due. Any pandemic consequences were considered in that calculation.
However, according to Shai Akabas, head of economic policy at the Bipartisan Policy Centre, worries that the programme may run out of money and cease issuing benefits are unwarranted.
Safeguarding Social Security
Many people flinch when they hear the words “insolvent” or “bankrupt,” Akabas said. “They automatically assume the programme will just disappear.”
“The existence of social security dates back more than 80 years. And more people support it than almost any other government activity,” he said. It is quite unlikely to disappear anytime soon.
Furthermore, the sooner politicians act, the less drastic the effects. Among the changes they would most likely contemplate are more taxes, benefit cuts, or a mix of the two.
“It’s not so serious and significant that the programme will vanish,” Akabas added. “However, it is not such an easy fix that we can wait until the last minute and simply patch it overnight.”
According to Joe Elsasser, a Social Security claiming firm, benefit reduction would likely be less than 25%, if at all.
To assuage people’s anxieties and allow them to plan, Covisum has launched an online tool. That shows how Social Security benefit reduction will effect their monthly checks. Notably, the calculator does not consider a situation in which benefits are completely eliminated.
“The likelihood of it going to zero is as close to zero as you can get,” Elsasser explained.
The Harris Poll conducted the nationwide poll online between April 19 and May 7. It includes 1,931 adults from the United States.
