Will COVID-19 Cause Social Security to Run Out of Money?

Ready For Retirement

James Conole, CFP®

Investment Planning, Bonds, Education, Stocks, Cash, Business, Dividend Investing, Retirement Planning, Retirement, Investing, Tax Planning

5 • 706 Ratings

🗓️ 9 June 2020

⏱️ 19 minutes

🔗️ Recording | iTunes | RSS

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Summary

On this episode of the Ready for Retirement podcast, James discusses the question: Will Social Security run out? In the aftermath of the economic impacts of COVID-19, many people are concerned by the new budget model predictions that purport that the Social Security trust will be depleted sooner than expected. There are many factors to this prediction, a considerable one being the high unemployment rate at this time. It is important to remember that Social Security was created in 1935. The a...

Transcript

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0:00.0	Discover the tips and strategies that will help you achieve your retirement goals.
0:09.3	I'm your host, James Canole, and this is the podcast dedicated to helping you retire well.
0:14.6	It all starts right here on Ready for Retirement. for retirement.
0:29.3	Hi, everyone and welcome to another episode of Ready for Retirement.
0:31.0	I'm your host, James Cannell.
0:34.4	And on today's episode, I'm actually going to be answering a listener question that actually came to me through another podcast that I host, but I thought it very appropriate for this podcast. And here's a question. I recently read that it is likely that
0:41.7	social security benefits will be cut by up to 25% by the year 2030 because of the national debt,
0:47.3	which has been further accelerated by the coronavirus pandemic. If this becomes true,
0:52.2	would it make sense to take social security benefits at age 62 instead of waiting until full retirement age if one can capture three to four more years before Social Security is reduced?
1:02.9	So essentially, and that's the end of the question there, what this listener is asking is, one, what's the deal with Social Security?
1:09.8	How has coronavirus impacted this? What should we expect
1:12.4	from Social Security as a system going forward? And number two, what can I do about it? So it's a very
1:17.7	good question, and we're going to address that in today's episode. The research that was referenced in
1:22.7	what I guess a lot of people are reading and what a lot of articles are about is there was research
1:26.5	done by the University of Pennsylvania's Wharton School of Business, and they did a new
1:30.5	budget model. And what the budget model predicted is that the Social Security Trust, which is what
1:35.6	is used to pay a lot of Social Security benefits today, will be fully depleted somewhere between
1:40.2	2032 and 2034. Now, this actually isn't new information. We've known for a while that the
1:47.2	budget was going to be depleted and that the trust was going to be depleted, but what we thought
1:51.1	before was that it would last until 2035 or 2036. So this isn't presenting a new problem. It's just
1:57.5	expediting the problem. It's bringing on that depletion or it's bringing on that problem
2:01.5	sooner than maybe we originally thought that it would come, but it's not as if this is a new issue.
	...

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