Solving for insolvency and Social Security. Is Social Security really dying?

That's what we'll talk about this week on Industry Focus Financial's Edition. Welcome everyone. I have John Maxfoot on the phone. It's Gabby Laperra here as your host.

So we're going to talk about Social Security this week. I have been reading a lot about this on the Motley Full website.

It seems that we published quite a few articles on this.

So I think this will be an interesting show.

So the thing about Social Security that is on everyone's minds I think is whether or not Social

Security is going to die anytime soon.

I know that I initially misunderstood what was going on. I thought that, well let me back up. So

Social Security is made up of two different funds, right John?

That's exactly right. Yeah, you have one trust fund. When we think of Social Security, it's like two, it's basically two big trust funds and then taxes that pay into those funds and then those funds pay out the benefits. And then one fund is for retirement benefits and the other is for disability benefits.

Absolutely and so the Social Security system started during the Great Depression

but the system has gotten a lot bigger than it initially was and the type of people

in it are pretty different. Initially the system was imagined for people who weren't

living that much beyond retirement age and that's just not the case anymore.

People are living 20 plus years past retirement age now regularly and some people live far beyond that.

And then on top of that there's a lot more people in the system

than there were initially, which is kind of what's driving

the depletion of the Social Security funds, right?

That's exactly right.

So if you think about it, it's a, they call it a pay-as-you-go system.

So you have a whole bunch of taxpayers that are paying a certain percentage of their income

into the system every year.

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