Social Security is vital for many Americans, but the program faces long-term financial problems. According to a report from the Congressional Budget Office, Social Security will run a 12% deficit for the next decade. Retirees are nervous about how that could affect their benefits.
In the following video, Dan Caplinger, The Motley Fool's director of investment planning, runs through the CBO report to look at the impact of Social Security deficits. Dan notes that right now, the Social Security Trust Fund has enough money to cover the deficits, but with the gap expected to rise to 30% by 2030, the Trust Fund will eventually run out of money. That could cause a big problem in the early 2030s, as tax revenue will only bring in about $1 for every $1.30 in benefits promised. That's one big reason policymakers are looking at potentially draconian cuts in order to prevent even larger cuts later.
