There's good news and bad news. First, the bad: Social Security's funds are likely to become insolvent between 2033 and 2037. If no changes are made to the program, benefit checks won't disappear, but they'll likely shrink by about 25%. The good news is that changes probably will be made to Social Security. The big question, though, is what kind of changes, because you'll probably like some of the proposed changes a lot more than others. Thus, it's smart to learn where the presidential candidates stand on Social Security.
Remember how vital Social Security is, too. As Bernie Sanders has said:
Today, Social Security is more important than ever. Over half of workers between the ages of 55 and 64 have no retirement savings. More than a third of senior citizens depend on Social Security for virtually all of their income. One out of every five senior citizens is trying to scrape by on an average income of just $8,300 a year.
Bernie Sanders on Social Security
Senator Sanders isn't likely to be the Democratic nominee at this point, but he's still in contention. Democrats are generally in favor of making Social Security stronger by having the wealthy pay more into it and even by increasing benefits paid to retirees. Even President Obama recently called for expanding the program, saying, "It's time we finally made Social Security more generous ... and increased its benefits so that today's retirees and future generations get the dignified retirement that they've earned."
Bernie Sanders is fully in that camp. He has said, "I will do everything I can to expand Social Security benefits, not just for seniors, but for disabled veterans as well." Among his goals are to lift the cap on earnings that are taxed for Social Security. You may not realize it, but everyone's income faces the same tax rate for Social Security -- only up to a certain capped annual earnings amount. (As of 2016, the cap was $118,500.) Thus, someone earning $118,500 in 2016 and someone earning $5 million will pay the same Social Security tax, with the latter person's earnings above $118,500 going untaxed -- a fact that many see as unfair.
Sanders has also supported hiking the minimum benefit level for retirees with low incomes and increasing cost-of-living adjustments of benefits.
While some Republicans have advocated privatizing Social Security, raising the retirement age, and cutting benefits as solutions for the looming trust fund shortfall, Sanders has rejected all of those measures. He has noted on his website, "Corporations destroyed the retirement dreams of millions over the past 30 years by eliminating defined-benefit pensions plans," adding, "Millions of Americans lost their life savings after Wall Street's recklessness crashed the economy in 2008."
Hillary Clinton on Social Security
While Sanders is looking to boost Social Security benefits for all retirees, Hillary Clinton is more targeted in her goals, focusing mostly on boosting benefits for survivors and for those who collect smaller benefits due to being out of the workforce for a while, taking care of young, old, or ailing loved ones. In other words, she's largely looking to improve the financial condition of many women. There's a good case for that, as female retirees collected benefits that were 78% less than those of male retirees according to the Social Security Administration's 2015 Annual Statistical Supplement.
Like Sanders, Clinton is opposed to privatizing the program and to raising the retirement age. She also favors making the wealthy pay more into the system, going on record as supporting lifting the payroll tax cap and broadening the tax base. Should she go as far as to lift the cap entirely, taxing all of each worker's income, instead of just the first $118,500 of it, it has been estimated that 71% of the Social Security trust-fund shortfall could be wiped out over a 10-year period.
Donald Trump on Social Security
If you want to know a lot about Donald Trump's positions on Social Security, it won't be easy to find out. He has no position stated on his campaign website, as of the last time I checked, and he has flip-flopped on a lot of positions on other topics, making any current position seem not that strongly held.
During a Republican debate in March, Trump reportedly said, "It's my absolute intention to leave Social Security the way it is," adding, "I want to make our country rich again so we can afford it."
On the other hand, several of his recently hired advisors are on record as wanting to privatize Social Security, reduce benefits, and otherwise shrink the program -- including cuts to disability, Medicare, and Medicaid benefits. After Trump spoke out in general support of Social Security, his advisor Sam Clovis suggested on May 11 that Trump would consider making cuts to the program.
Trump has advocated for cutting taxes, which isn't a promising sign for Social Security. On the other hand, he promises to create lots of jobs and turbo-charge the economy. If he were to succeed at that, more people working and paying into the system can only help it.
There are still several months before the general election, and there will be many speeches and debates. If you're interested in the future of Social Security (and you should be), pay attention and assess the plans of the candidates.
Longtime Fool specialist Selena Maranjian, whom you can follow on Twitter, owns no shares of any company mentioned in this article. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.