Coronavirus Just Inflicted This Devastating Blow on Social Security

From Birch Gold Group

As if Social Security didn’t already have enough challenges ahead, we now have yet another complication. Not surprisingly, it’s a ripple effect from COVID-19.

Before coronavirus hit the scene, most experts agreed that if nothing was done, Social Security would be facing a 21% cut by 2035.

A chart from page 13 of the latest Trustees Report illustrates this prediction:

As bad as this outlook is, it’s been getting worse and worse over the years. You can see a marked decline in just the past year – from 2019 to 2020 – in the following chart:

And now that the virus is hitting the economy with full force, any of those forecasts could be generous at best. Here’s why…

Thanks to lockdown restrictions implemented across the country, official U.S. unemployment still sits at 13.3% (one of the highest since 1939). Some unemployment estimates are even higher.

Whatever statistic you choose to believe, there’s no arguing that the main revenue source for Social Security has been significantly reduced.

The newest Trustees Report did not factor in these impacts, either:

The projections and analysis in these reports do not reflect the potential effects of the COVID-19 pandemic on the Social Security and Medicare programs. Given the uncertainty associated with these impacts, the Trustees believe that it is not possible to adjust their estimates accurately at this time.

This could mean Social Security will face drastic cuts before 2034 if the trust fund follows the “worst case scenario”. According to the Independent Institute:

With U.S. unemployment now estimated to be “north of 20 percent,” Social Security is experiencing something much closer to its worst-case scenario, where its trust fund that provides money to boost the retirement income of millions of Americans will run out of money years sooner.

In fact, according to Bipartisan Policy, the trust fund that pays retirement benefits may experience drastic depletion eight years from now:

Our preliminary analysis finds that the Disability Insurance (DI) trust fund’s reserves may be depleted during the next presidential term, and the Old-Age and Survivors Insurance (OASI) trust fund’s reserves may be depleted right around the time of the 2028 presidential election.

The main reasons for this rapid depletion of Social Security funds can be linked to (1) less workers paying into the fund and (2) older workers tapping funds earlier.

“The coronavirus pandemic has moved up Social Security’s day of reckoning,” according to the Independent Institute.

To put it succinctly, this is NOT good.

Tired Solutions to an Increasing Social Security Problem

To solve the Social Security conundrum, lawmakers present the same old solutions over and over again, each time hoping for a different result.

These tired solutions include:

• Raising the payroll tax rate
• Increasing the wages subject to Social Security taxes
• Raising the full retirement age
• Reducing the annual cost-of-living adjustments
• Cutting benefits

Any of these solutions could work, at least temporarily. But do you want to bet your retirement on theoretical solutions that could work?

Don’t Let Their Debt “Games” Weigh Down Your Retirement

Whether Social Security runs out of money in 2028, 2034, or later, one thing is certain: the future is far from certain. Each expert has their own idea of what may happen, but who knows if and when any of it will come to pass?

What you can do right now is consider adding protection from instability to your retirement savings through diversification.

Whatever you decide to do, don’t wait for the lawmakers to outline your future. Take control for yourself, and prepare your savings for anything that may come.

With global tensions spiking, thousands of Americans are moving their IRA or 401(k) into an IRA backed by physical gold. Now, thanks to a little-known IRS Tax Law, you can too. Learn how with a free info kit on gold from Birch Gold Group. It reveals how physical precious metals can protect your savings, and how to open a Gold IRA. Click here to get your free Info Kit on Gold.

-----------------------------------------------------
It is my sincere desire to provide readers of this site with the best unbiased information available, and a forum where it can be discussed openly, as our Founders intended. But it is not easy nor inexpensive to do so, especially when those who wish to prevent us from making the truth known, attack us without mercy on all fronts on a daily basis. So each time you visit the site, I would ask that you consider the value that you receive and have received from The Burning Platform and the community of which you are a vital part. I can't do it all alone, and I need your help and support to keep it alive. Please consider contributing an amount commensurate to the value that you receive from this site and community, or even by becoming a sustaining supporter through periodic contributions. [Burning Platform LLC - PO Box 1520 Kulpsville, PA 19443] or Paypal

-----------------------------------------------------
To donate via Stripe, click here.
-----------------------------------------------------
Use promo code ILMF2, and save up to 66% on all MyPillow purchases. (The Burning Platform benefits when you use this promo code.)

Click to visit the TBP Store for Great TBP Merchandise