Will Social Security be around once you're ready to retire? If you think the answer to that question is "maybe" or "no," you're certainly not alone.
In a recent Nationwide survey, 53% of pre-retirees expressed concern about Social Security's long-term viability. And many of today's workers worry that Social Security won't be available to them once they're eligible for benefits.
Clearly, that's a scary thought. But it's also not really an accurate one. And no matter how close or far away retirement is, it's important to know what's really happening with Social Security.
Image source: Getty Images.
The good news: Social Security isn't going away
We might as well start with information that might help you breathe a sigh of relief. Although Social Security is facing some financial challenges, the program is not on the verge of disappearing. And even if you're decades away from retirement, you really don't have to worry about Social Security not being there for you in some capacity down the line.
Social Security gets the bulk of its revenue from payroll taxes. You may not like forking over a chunk of your pay to help fund the program, but as long as workers continue to hold down jobs and pay the taxes they're required to, Social Security will get funding. And that means the program has a lot more staying power than some people might think.
The not-so-good news: Social Security cuts may be inevitable
We can probably all agree that getting some income out of Social Security is better than getting none at all. With that in mind, let's discuss what is a likely scenario for Social Security.
In the coming years, the program expects to owe more in scheduled benefits than it collects in payroll tax revenue. And the reason largely boils down to the fact that baby boomers will be retiring in droves and filing benefit claims at the same time, thereby draining the program's financial resources.
Now thankfully, Social Security has trust funds it can tap to keep up with scheduled benefits for a period of time. But once those trust funds run dry, benefit cuts will be on the table.
As of now, it's looking like those trust funds could be emptied by 2034. This means that those retiring in more than a decade might end up with a smaller Social Security benefit than they'd otherwise be entitled to.
Clearly, that's not a great thing. But it's also far better than Social Security disappearing completely. And also, to put a positive spin on things, today's workers at least have a heads-up about Social Security cuts, which means they have an opportunity to boost their savings to make up for them.
Unfortunately, current retirees don't have that option. And that's a major issue lawmakers will have to address if benefit cuts do indeed come to be.
But all told, the real deal with Social Security is that it isn't going away, but it's likely going to shrink. Now that you know the scoop, you can do what you can to compensate for smaller benefits in the future. In fact, you may want to see what you're currently contributing toward retirement savings and boost that figure now if you can -- or at least make plans to do so the next time your income increases.
