The Future of Social Security

Read Time / 2 Minutes

Theme / Retirement

The number of retirees who receive Social Security payments is staggering: 46.7 million retired workers receive a total of $72.7 billion monthly.  In 2022, the average retirement benefit for all retired workers was $1,657 per month.  Social Security is a major source of income for many retirees, representing about 30 percent of income for older adults.  Retirees start collecting Social Security between 62 and 70 years of age.  For those retirees that live to age 65, average life expectancy is about 20 years – a bit longer for women and a bit shorter for men.  Clearly, Social Security income plays an important role for many retirees for many years.

You may have read headlines that Social Security will run out of money in 2033.  That headline is somewhat deceiving.  Social Security is funded through payroll taxes, both employer and employee pay a 6.2% Social Security tax on wages earned up to the taxable wage base.  The taxes collected are invested in a trust fund, which will collect less in payroll taxes than it pays out in benefits by 2033.   After that date, scheduled tax income is projected to be sufficient to pay only 76 percent of scheduled retirement benefits – and this remains the picture for the next 75 years. 

Unfortunately, many people are under the impression that Social Security benefits will cease in 2033, rather than potentially being reduced by 24%.  The pressure on Congress is likely to build over the next few years to resolve the shortfall.  As we have seen, the extent to which Americans are dependent on Social Security benefits makes it hard to imagine that Congress could avoid addressing the issue.

At Christian Wealth Management, we expect the Social Security shortfall to be rectified by 2033.  Even so, as Christian Financial Advisors, we encourage people to place their trust ultimately in the Lord: “Some trust in chariots and some in horses, but we trust in the name of the Lord our God” (Psalm 20:7).

Doug Hanson, MBA

Wealth Advisor

208.697.3699

doug@christianwm.com