Will Social Security Really Run Out of Money?

With millions of Americans counting on Social Security to be there when they retire, news that the program could run out of money is scary. But many question whether a looming Social Security funding shortfall is really something to worry about.

In the following segment from their video guide to investment planning, Motley Fool director of investment planning Dan Caplinger talks with Fool markets/IP bureau chief Mike Klesta about Social Security's coming funding challenges. Dan notes that one reason why so many people take their Social Security benefits early is that they think that the program might not be able to pay them later in life. But he thinks that's a mistake, because worst-case scenarios still have Social Security having enough money to pay full benefits for decades to come even without any changes to the program. Moreover, even under current law, retirees would still get about 75% of their benefits even after the Social Security Trust Fund is depleted. Dan concludes that with the likelihood of at least some action from lawmakers before automatic benefit reductions would take place, there's little reason to worry that Social Security won't be there when you need it.

Your real worry about your Social Security
What's much smarter than worrying needlessly is for you to take the time and make sure that Social Security gives you all the benefits that you're entitled to receive. We want to help. In our brand-new free report, "Make Social Security Work Harder for You," our retirement experts give their insight on making the key decisions that will help ensure a more comfortable retirement for you and your family. Click here to get your copy today.

Read/Post Comments (31) | Recommend This Article (22)

Comments from our Foolish Readers

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  • Report this Comment On February 23, 2014, at 9:43 AM, kurtdabear wrote:

    Gee, Dan, that's really reassuring, but there really isn't any trust fund because the government long ago borrowed that money because they couldn't live within their budget. Since they borrowed the Social Security funds because they didn't have "enough" general revenues, where are they going to get enough general revenue to start paying the future Social Security payments they owe? Fact is they won't be able to, so as soon as payroll contributions fall below current payments, benefits will have to be cut. And that day is no longer off in the distant future because with so many people unemployed for so long and not paying into Social Security during the past five years, the insolvency date has moved up to 2017. Our government is basically broke, and that includes Social Security and Medicare.

  • Report this Comment On February 23, 2014, at 9:46 AM, ghelmz21 wrote:

    Haven't we already run out of money? The social security so-called trust fund is on paper only and in accordance with that we are 17 trillion in debt and printing money with no backing but " HOPE ", no one loses confidence in our false economic system! We can't fund the government programs and we can't repay our debt so when this happens to an ordinary person or business that doesn't have the luxury to tax or print it's own money, guess what happens!

  • Report this Comment On February 23, 2014, at 9:59 AM, amysname wrote:

    If the Obama administration keeps encouraging people not to work so that they can get free medical etc. then of course we will run out of money. There will be more taking out than putting in. The system has depended on the new generation to keep replenishing the money. Less workers...less money!

  • Report this Comment On February 23, 2014, at 10:00 AM, KevinO3826 wrote:

    How about we take away the lawmakers retirement money and put that into social security until they figure out a way to pay all that money back into the fund. I will say we should also triple the cap at which social security is taken out. I pay it on all my money I earn. That would make it solvent quickly. I have paid into this for 37 years now. My employers have had to match those amounts. The blame lands at the feet of those who wish to overspend.

  • Report this Comment On February 23, 2014, at 10:21 AM, Ostrowsr wrote:

    Everyone's case is different. It depends on your "equation". But usually, after studying your budget likelihood in retirement, the final decision of when to take benefits is simple logic.

  • Report this Comment On February 23, 2014, at 10:31 AM, VegasSmitty wrote:

    If SS ever ran out there would be 535 dead politicians in D.C.

  • Report this Comment On February 23, 2014, at 10:47 AM, WSK wrote:

    If you have a pension and/or 401k-403b savings account and/or saved a good deal for retirement you will also be heavily taxed on your SS so you can support all the losers that never saved and spent their money on the newest phones, cars, houses they could not afford, and vacations you did not take because you were saving.

  • Report this Comment On February 23, 2014, at 10:54 AM, JePonce wrote:

    Not a chance.

    Social Security and Medicare taxes are here to stay.

    Obamacare Death Panel will kill off the elderly before they can collect their benefits, leaving huge reserves to be transferred to the General Fund.

    The only remaining question, will the Neocommunist Left use the IRS to target Conservatives, first?

  • Report this Comment On February 23, 2014, at 11:31 AM, buz wrote:

    Anybody that doesn't know that the Trust Fund is already spent and nothing but a room full of I O U's that the govt. has to borrow to pay off is not somebody that I would want to take investment advice from

  • Report this Comment On February 23, 2014, at 11:35 AM, AHuston wrote:

    Didn't SS go into the red in recent years under Obama? So if SS paid out more than it took in the here and now, why do you think it is solvent for decades to come? More federal propaganda to keep the masses at bay and give it more time to do nothing.

  • Report this Comment On February 23, 2014, at 12:13 PM, howardb197 wrote:

    WHY is it you always hear about MY Social Security running out of money but never hear of bum's Welfare running out of money... I guess it's because I've actually paid into a system and they need a helping hand...

  • Report this Comment On February 23, 2014, at 12:33 PM, mike218 wrote:

    The bigger issue is not social security, but a political system which is totally incapable of redefining the national wealth and financial assets to meet today's needs. It is a shame that past generations were able to take America to the top and provide prosperity for nearly all. In addition the leaders were actually able to bill a Cold War arsenal and aid the world as well. These geniuses can't even pay bills ,let alone maintain NASA. Electable leadership today means finding an electable niche ,just to be heard. Gridlock is the best thing which can happen. Any legislation passed by these politicians is two or three steps back or headed for the federal court system.

  • Report this Comment On February 23, 2014, at 12:35 PM, rioesmarex wrote:

    On paper Social Security has been broke for decades because Congress stole/borrowed the money for the General Fund and has never repaid it.

    However, that aside .... it is IMPOSSIBLE for Social Security to go broke because all they have to do to keep solvent is keep increasing the premium payments made by you and your employer.

    Even if the rate goes up to 25% of your income, that's what you'll have to pay if you want benefits down the road.

    Each new generation has to pay more than the previous one to keep the system going.

    Nothing wrong with that because each generation earns more than the last one.

  • Report this Comment On February 23, 2014, at 12:42 PM, floydhowardjr wrote:

    S/S Bankrupt? Thanks again Obama!!! Democrats keep adding to the unemployed and underemployed! By the time they are voted out only one in ten Americans will be employed! If you lose your job, your social security, medicare coverage, your doctor, your insurance BLAME a Democrat. Next time you go and vote...remember WHO did this to YOU! DEMOCRATS! People Not In Labor Force Soar To Record 91.8 Million!

  • Report this Comment On February 23, 2014, at 12:48 PM, Lance1234 wrote:

    So if you were to be due $2000.00/month SS Benefits, it could be 1500/month. Plus inflation adjusted increases that are in no way going to keep up with inflation the way it is now calculated, to be accompanied by big increases in Medicare Part B Premiums deducted from the surviving monthly amount that will have greatly reduced buying power. .. but, don’t worry…be happy! Our politicians have it under control and even if they don’t it will be only a partial collapse which we will call something else and nobody will notice. If we inflate the currency and devalue it enough we may be even able to write the check for the whole 2 grand that won’t buy anything.

  • Report this Comment On February 23, 2014, at 1:26 PM, loran wrote:

    I am not personally worried about Social Security running out for the wife or me. But I am concerned that if something is not done soon, my children and grandchildren will not have that benefit in their retirement years. That could be devastating to them and the rest of our citizens. I do not think my children and such are taking this seriously at all. I think they are part of the "entitlement" mentality. This is what they are being taught in the public schools of all places.

  • Report this Comment On February 23, 2014, at 2:13 PM, EddieFL wrote:

    Social Security operates at a surplus and has not contributed one dime to our nation’s budget deficit. Even in the current recession, the Social Security Trust Funds have continued to grow. In addition, Social Security benefits already are modest. The average retirement benefit is only about $14,000/year and, for women, the average comes to less than $12,000/yr. What is there to cut?? And despite the scaremongering, Social Security isn’t “going broke”. Even without any changes at all, Social Security could pay out full benefits until 2037. It will take only modest changes to ensure that Social Security remains strong for our children and grandchildren.

  • Report this Comment On February 23, 2014, at 2:15 PM, skipgainer61 wrote:

    SS will not run out of money if we stop our politicians from, paying illegals, paying dead people and stop these politicians from stealing from us. If not there will be h-ll to pay.

  • Report this Comment On February 23, 2014, at 2:18 PM, JoeTheEconomist wrote:

    Irresponsible journalism at its best.

    "because worst-case scenarios still have Social Security having enough money to pay full benefits for decades "

    Is factually wrong. The worst case scenario in the 2013 Trustees Report is 13 years away, not "Decades". In a good economy, it is 17 years if you look at CBO's latest projections.

  • Report this Comment On February 23, 2014, at 2:41 PM, thrilled747 wrote:

    Why is the nat debt 17+1/3 trillion.Cause of programs such as SocSec.There is no locked box.It's all under one fund.Americans contribute 40% to pay bills?They borrow 60%.Our total interest is over 1/2 billion A a year.

  • Report this Comment On February 23, 2014, at 3:01 PM, ruffus wrote:

    Nobody can see the big problem and that is people should go to Washington DC to SERVE not stay and get rich like what s going on now.You have congress working part time and getting paid 6 figures ++++,health ins that we pay 75% subsities for and these same people are staying for life.You have million air farmers and their families are getting big subsities and every time they say anything about SPENDING ITS ALWAYS ON THE BACKS OF OLD DISABLED AND RETIED PEOPLE.We should have term limits 2 terms like the president,NO LOBBYING NO STAFFING FOR 10 YEARS to make sure these people come to dc serve and go home like it use to work. we need to totally reform gov from waste and fraud and trace EVERY SINGLE DOLLAR TO SEE WHERE ITS BEING SPENT. OUR BEST BET IS TO START WITH CONGRESS THEY ARE ALWAYS SAYING WE NEED TO CUT SPENDING I THING THEY SHOULD LEAD BY EXAMPLE.

  • Report this Comment On February 23, 2014, at 4:31 PM, luckyagain wrote:

    "Will Social Security Really Run Out of Money?"

    The answer is NO. What might happen is that Social Security might reach a point where it can not fully pay everything that is promise. The truth is that this is based upon projections of what will be happening in 20 or 30 years. The simple truth is that these projections are based upon an extremely slow growth rate in the US economy. The reason that the projected rate is so low is because the statisticians at Social Security are required to expect the worse case.

    It is almost impossible to predict the cost of gasoline next month, so all of these predictions are not to be trusted.

  • Report this Comment On February 23, 2014, at 8:43 PM, dwwdww wrote:

    NO "Chained CPI" for Social Security.

  • Report this Comment On February 23, 2014, at 8:47 PM, cincyfan1 wrote:

    because SS disability..........only..............affects 12million will only be able to only pay 75 per cent of the government doesnt really care about that 12million who will be out on the street....disabled....and even more broke than before......and disabled.....i paid into the system for 40 years

  • Report this Comment On February 23, 2014, at 11:59 PM, moneymarch wrote:

    because all they have to do is have enough money in the fund to take care of the present retires. as the retires die off the money can be "Borrowed by the government" again.

    Keep floating money in this manner and never have to repay the fund again.

    I bet there are plans in the works to do this "TRICK" with the post office retirement fund.

    GET OUT OF AFGHANSTAN, STAY OUT OF SYRIA (hear that LURCH (Kerry nickname))



  • Report this Comment On February 24, 2014, at 12:00 AM, moneymarch wrote:



  • Report this Comment On February 24, 2014, at 12:14 AM, broke2014 wrote:

    in the united states

    the average life span of a man is 77

    the average life span of a woman is 82 if you want to collect your full social security benefits you must wait until your 66 and there is talk about raising it to the age of 70. So basically they will keep raising it so you die before you can collect deficit problem solved

  • Report this Comment On February 24, 2014, at 12:54 AM, lyndagroom wrote:

    Social Security can be easily fixed. It requires political courage and the ability to take on the elites and their vision of the future. The economics are far easier than the politics involved.

  • Report this Comment On February 24, 2014, at 1:00 AM, akarayg wrote:

    Social security may run out of money? Social security recipients paid into that. We never hear that welfare might run out of money. Welfare recipients didn't pay into that. Why is that?

  • Report this Comment On February 24, 2014, at 6:02 AM, 12yogi wrote:

    As long as our "representatives" in congress and our president, regardless of who it is, has access to the "fund" that Johnson eliminated, there will be problems with the SS we pay in. It is OUR money yet they use it for whatever silly "need" they have. Now there is talking again of reducing "payroll tax" which is our SS. The people who are wanting this to put more money in their pocket now do not think about where their SS will come from! Re establish the SS fund, remove the payroll cap, it will be sustainable forever!

  • Report this Comment On February 24, 2014, at 5:21 PM, neamakri wrote:

    before the year 2010 there were 4 workers per retiree (4:1). Sometime after 2010 when baby boomers retire, that will change to 3 workers per retiree (3:1). These are facts. Any discussion about the future of Social Security must include these facts.

    In order to keep the same pay-as-you-go Social Security, either (a) workers must add 33% more tax to cover the missing worker, or (b) retirees must accept 25% less money due to the missing worker. So far all schemes to "save" social security involve reducing payments to retirees.

    Or consider this; the country of Chili many years ago had the same system as us, and privatized their retirement system. Each Chilean has their own retirement account (like 401K). Since then the country of Chili has vastly improved its GDP and there is far less poverty. All we have to do is copy them! Privatize!

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Dan Caplinger

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

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