Social Security Insecurity
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As if the world isn’t already worrisome enough, I’ve recently been fielding lots of questions regarding the current state of Social Security, so I wanted to address the most popular worries I’ve heard. As is true with anything the media gets ahold of, there are quite a few misconceptions about what is going on, so I’ll do my best to provide some clarity here.
Before I get started, I’d like to note that there is no way to eliminate political bias completely, so I am striving to avoid as much as possible by sharing information that comes exclusively from the Social Security Administration itself, rather than any particular media outlet. Here we go.
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What I’ve Heard: Social Security is cutting its staff by 50%.
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From the Source: Social Security is reducing its workforce, but not by anything close to 50%. They have stated that they are reducing their total workforce from 57,000 to 50,000, with the goal of these reductions being to eliminate redundancies and non-mission-critical work efforts. It is expected that most of the reductions will be accomplished through retirements and voluntary separations. (SSA Article)
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What I’ve Heard: Social Security is closing local field offices.
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From the Source: As of this writing, Social Security has not announced the closure of any local field offices. This misunderstanding may be a result of the announced restructuring plan in which SSA stated that it is reducing its regional offices from ten to four. (SSA Article #1, SSA Article #2)
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What I’ve Heard: Social Security is eliminating phone services for benefits help.
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From the Source: At this time, all telephone-related services remain available in their historical form with one exception: The only change is that SSA will now require either online or in-person identity verification when making changes to direct deposit information. According to SSA, approximately 40% of Social Security direct deposit fraud is associated with someone calling SSA to change direct deposit information, so this new requirement is intended to protect beneficiaries and ensure the integrity of the program. (SSA Article)
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Related Note to All Three Concerns Above: There have been reports about longer wait times for both telephone and in-person service due to these changes. This may be true, but based on my experience, long wait times are not a new complaint, nor are they limited to the SSA. I can only assume that you have noticed, as I have, that longer wait times and poor service are becoming more common across all industries (in both public and private organizations), so it’s possible that this could just be a sign of the times, more than anything else.
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What I’ve Heard (Again): Social Security is going bankrupt.
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From the Source: According to the most recent (2024) "Social Security Trustees Report," Social Security can pay full benefits through 2035, at which point, the famed Social Security trust fund would be depleted. Beyond that time, assuming Congress takes no further action to remedy this issue, the SSA would initially still be able to pay about 83% of all scheduled benefits, despite the depleted trust fund. This is because Social Security is mostly a "pay-as-you-go" system. Obviously, this potential outcome is not ideal, but it’s far from the doomsday scenario of $0 benefits payable to beneficiaries that some recipients seem to believe is inevitable.
Furthermore, it's encouraging that the calculated changes that would be required to bring Social Security back to full funding status through about 2098 are currently manageable.
Admittedly, getting our elected officials to make these changes may seem like a tall order. But given the incredible importance of the Social Security program to millions of Americans, I’d like to think that the voices of the masses will grow loud enough to get Congress to shore up what I believe is one of the best-run public pension programs in the world. (Sources: SSA Report; Summary of Report: Center on Budget and Policy Priorities)
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I’m sure there are other concerns, but these seem to be the primary ones right now. I’ll include the disclaimer that all information included here is subject to change at any moment.
Before I go, there is one action item that nearly everyone should consider, regardless of age. That is, you should go online to create your personal "my Social Security account." This online portal allows you to handle many necessary tasks without ever needing to visit an office, which might help you avoid many of the service-related concerns noted above.
I hope you find this note helpful in clearing up some popular misconceptions. As always, I welcome your questions and concerns. Stay the course!
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Nick Davis, CFP®, ChFC®, RICP®
Founder, Lead Financial Planner
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