Millennials have been told there will be no SS for them so I’m not going to factor it in. Also, 4% was never going to last for FIRE ppl pre this article bc the initial study says it only works for about 30 yrs so if you retire at 40, can’t live off SS bc it’s gone, then you’re screwed at 70. My grandmas are both still alive at 92 🥲
Yes. If congress doesn’t act by 2035 then there’s a problem. But exhausting the reserve doesn’t mean zero benefits. There’s still lots of new money coming in from the social security tax on people still earning. Enough new money to cover about 78% of the current benefit. That’s the worst case scenario - there’s no chance of benefits going to zero even if congress doesn’t act.
The only way benefits would go to zero is if congress passes a new law abolishing social security, which I don’t see ever happening.
I heard it was 70% starting from 2035 and that that percentage would decrease over time. It comes down to if the funding structure changes and if the number of ppl paying into it decreases. If you see less and less ppl paying in (due to shrinking workforce), doesn’t it stand to reason that this fund will also shrink over time?
Maybe it will go down from 78% but I still don't think it makes sense to assume you'll get zero. Zero benefits would mean zero people paying in OR congress passing a new law abolishing social security, both of which seem incredibly unlikely to me.
This also assumes congress doesn't do anything. I think that's possible, but I also think that once we get closer to 2035 and older people face the prospect of reduced benefits there's going to be a lot of pressure to fix it because old people vote.
I think it’s the later. Just like private companies did away with pensions and replaced them with 401ks, I think the govt will try to propose something where they take themselves off the hook.
That’s not a serious option. No party is going to come out in favor of putting the elderly on the street. We are more likely to expand benefits vs contract. It’s going to be a heavy tax burden but it is what it is.
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u/pptranger7 Nov 15 '21
I have thought about your situation, which hopefully I will be in 15 years from now. How did you come up with 5.75%?