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Will Social Security Run Out Before You Retire? Here's What the Experts Think

By Christy Bieber – Nov 13, 2018 at 6:36AM

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More than half of all Americans are likely wrong when it comes to the future of Social Security benefits.

Will Social Security be able to pay you benefits during retirement? Americans are skeptical about the prospect: A full 51% of non-retired Americans responding to a Gallup survey indicated they doubt they'll get any benefits from Social Security when they retire. 

So, should you be worried that Social Security is going to disappear before you're ready to shuffle off into retirement? Let's find out what the experts say. 

Social Security Card with Money

Image source: Getty Images.

Here's what experts predict about Social Security benefits

If you're thinking you'll be left out in the cold when it comes to Social Security benefits, you're probably worrying for nothing. At least according to the Center for Retirement Research at Boston College, which analyzed the 2018 Social Security Trustees Report.

The trustees report provides information on the funds available in the Social Security trust fund -- and the likelihood of those fund running out. 

The trustees report for 2018 shows that there's virtually no change in the program's future prospects compared with the year prior. While both the 2017 and 2018 reports do indicate that the Social Security trust fund is likely to run out of money in 2034, this isn't nearly as worrisome as it seems. 

Even though the Social Security trust fund is likely to be broke come 2034 if no changes are made, the majority of money for benefit payouts does not come from the trust fund. The money comes from taxes paid in by current workers. 

Money in the trust fund is used to make up deficits when Social Security has to pay out more than is paid in. Social Security is drawing from the trust fund more -- and will draw even more in upcoming years -- because people are living longer while fertility rates have dropped. With fewer young workers in the labor force to pay taxes into the program, more money will need to be taken from the trust fund, and the fund won't last forever.  

While this is undoubtedly an issue that could lead to problems in the future, payroll taxes are projected to cover around three-quarters of promised benefits when the trust fund runs out as projected in 2034. That means, as a worst-case scenario, if you retire after the trust fund goes broke, you'd still get around 75% of the benefits you expect. 

And there are simple changes -- such as raising the Social Security tax rate -- that could be made before the trust fund runs out to ensure that no one experiences a cut in benefits.

In fact, the Center for Retirement Research concluded that "the changes required to fix the system are well within the bounds of fluctuations in spending on other programs," but urges swift action so more taxpayers can share the burden of shoring up Social Security. 

This doesn't mean you can rely on Social Security alone

So you can breathe a sigh of relief -- Social Security will be there when you retire. While you may have to pay slightly higher Social Security taxes in the future, or may face a benefits cut, the popularity of Social Security -- and the fact there's a simple fix -- suggests lawmakers will likely act before any trust fund shortfall becomes a major issue. 

But this doesn't mean you don't have to worry about saving for retirement. Social Security benefits do not provide enough income for you to live on. In fact, if you rely on Social Security alone, you're likely to live just above the poverty level and to struggle to pay for basic needs as well as healthcare. 

Social Security is designed to replace around 40% of pre-retirement income -- assuming you get all the benefits you expect, which you likely will. Since experts suggest you need anywhere from 70% to 110% of pre-retirement income to live comfortably during your golden years, you're going to need a pension or investments to cover the shortfall. 

Start investing today and save as much as you can so you have enough money. 

Social Security will be there for you

As the experts have made clear, Social Security is very likely to be available to you, even if you retire after 2034, when the trust fund is expected to run out.

You just need to make sure you do your part to save so you can supplement Social Security with funds from retirement investments if you want your retirement to be a financially comfortable one. 

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