Social Security's Future: Q&A

There is an important national discussion going on concerning the future of Social Security. Below are answers to some of the most frequently asked questions.

Social Security Benefits

Q: What is Social Security?

Social Security is a federal insurance program that provides benefits to retired people, disabled people, survivors of workers who have died, and other intended beneficiaries. The official name for Social Security is the Old-Age, Survivors, and Disability Insurance (OASDI) program and it was created by the Social Security Act of 1935. For more information on Social Security generally, visit FindLaw's article: What is Social Security?

Q: How many people receive monthly Social Security benefits?

 In 2021, more than 179 million people worked and paid Social Security taxes. The program made payments to 65 million beneficiaries, 47 million of whom were retired workers. The average monthly retirement benefit was $1,658. The annual cost of the entire program is $1.2 trillion.​

Q: When am I eligible to receive Social Security retirement benefits?

 You can start receiving Social Security retirement benefits at age 62, but you are not entitled to full benefits until you reach your full retirement age. Those born from 1943 to 1954 reached full retirement age at 66. For those born from 1955 to 1959, the full retirement age increases by two months for each year. For those born in 1960 and later, full retirement age is 67. View the Social Security Administration (SSA)'s chart on age eligibility for more information. Also, you can visit FindLaw's article When Should You Start Claiming Social Security Benefits?  

Q: When can I expect my payment each month?

 If your birthday falls on the 1st through the 10th day of the month, your benefits will be paid on the second Wednesday of the month. Those born on the 11th through the 20th will be paid on the third Wednesday. And those with birthdays on the 21st through the 31st will be paid on the fourth Wednesday.

Q: Should I count on Social Security for all my retirement income?

A: No. Social Security was never meant to be the sole source of income in retirement. It is often said that a comfortable retirement is based on a "three-legged stool" of Social Security benefits, pensions, and savings. American workers should be saving for their retirement on a personal basis and through employer-sponsored or other retirement plans.

Q: Does Social Security have dedicated assets invested for my retirement?

A: Social Security is largely a "pay-as-you-go" system with today's taxpayers paying for the benefits of today's retirees. Money not needed to pay today's benefits is invested in special-issue Treasury bonds.

Social Security's Future

Q: I am retired and receiving a monthly check from Social Security. Are my monthly payments going to be cut?

A: No. There are no current plans to cut benefits for current retirees. In fact, benefits will continue to be increased each year with inflation. However, Social Security is a recurring hot button issue in Congress and, like any federal law, is subject to change in the future.

Q: I hear that Social Security has a big financial problem. Why?

A: Social Security's financing problems are long-term and will not affect today's retirees and near-retirees, but they are large and serious. Retirees are living longer and collecting more Social Security checks, but the birth rate in the U.S. has been decreasing. The result is that the worker-to-beneficiary ratio has fallen from 16-to-1 in 1950 to 3-to-1 today. By 2050, it will be 2-to-1. At thas ratio, there will not be enough workers to pay scheduled benefits at current tax rates.

Q: What will happen if Social Security is not changed?

A: If Social Security is not changed either payroll taxes will have to be increased, the benefits of today's younger workers will have to be cut, or massive transfers from general revenues will be required. The most recent Social Security and Medicare Boards of Trustees report (2022) stated that Social Security costs are projected to grow to 18.32 percent of the taxable payroll by 2078, and then fall to 17.64 percent in 2096.

Q: How big is the future problem?

A: Social Security is not sustainable over the long term at present benefit and tax rates without large infusions of additional revenue. There will be a massive and growing shortfall over the next 75 years.

Social Security Modernization

Q: What are the alternatives for modernization and reform?

A: The four basic alternatives that are being discussed -- singularly or in combination with each other -- are (1) increasing payroll taxes, (2) decreasing benefits, (3) using general revenues, or (4) pre-funding future benefits through either personal savings accounts or direct investments of the trust funds.

Q: Will Social Security be replaced by a private sector retirement plan ("privatization")?

A: No. There are no credible plans to replace Social Security as the foundation for the retirement of American workers.

Q: What is a voluntary personal retirement account?

A: There are many possible ways to structure personal accounts. Several proposals recommend that a personal savings account plan for Social Security be modeled after the federal government's Thrift Savings Plan. This very popular plan for federal employees and members of Congress allows a choice of five highly diversified, low-cost mutual funds. In the Thrift Savings Plan, no direct investments in individual stocks are allowed.

Global Aging

Q: Social Security's future challenges are caused by the aging of our population. Do other countries have similar problems?

A: Yes. Most countries in Europe, as well as Japan, have more serious challenges than the U.S. According to an article by The Japan Times, Japan tops the world rankings for the oldest society by proportion of persons over 65, and the country is rapidly graying. Even some developing countries are starting to face up to the aging of their populations.

Q: What are these other countries doing to face their challenges?

A: Many of these countries have begun to pre-fund their social security plans. More than 20 countries, including Britain, Australia, and Sweden, have established versions of personal accounts.

Related FindLaw Resources: Social Security Benefits

• The Social Security Act Overview
• Types of Social Security Benefits
• Your Pension and Social Security Benefits

Get Legal Help with Social Security Benefits

Understanding Social Security benefits can be tricky. Figuring out the best way to maximize these benefits can be confusing. Get some peace of mind by speaking with an experienced Social Security attorney in your area today.