WEALTHTRACK
Social Security Guru Mary Beth Franklin on The Program’s Health & Outlook.
Aug 2, 2024
Mary Beth Franklin, a Social Security expert, dives into the program's critical financial challenges and future outlook. She highlights the alarming depletion of trust funds by 2033 and discusses individual strategies to maximize benefits. Franklin emphasizes the importance of timing and investment decisions, offering insights on how married couples and divorced individuals can strategically claim their benefits. She also provides advice for younger workers on preparing for potential cuts, ensuring future retirees strengthen their income.
25:55
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Quick takeaways
- Social Security faces significant funding challenges due to demographic shifts, potentially leading to a 20% cut in benefits by 2033.
- Individuals can maximize their benefits by delaying claims until age 70, enhancing monthly payouts and survivor benefits for couples.
Deep dives
Challenges Facing Social Security Funding
Social Security is projected to encounter significant funding challenges by 2033, with forecasts indicating that promised benefits may be cut by approximately 20% if no action is taken. This situation arises from demographic shifts, notably the retiring baby boomer generation, which has increased the number of beneficiaries extensively. Currently, the ratio of workers to retirees is about two to one, leading to insufficient tax revenue to fully support the growing number of retirees relying on Social Security. Additionally, income inequality plays a role, as many high-income earners do not contribute to FICA taxes on income above a certain threshold, limiting the revenue available to sustain benefits.
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