Expect Social Security Benefit Cuts... I Am.

I want to share a fun fact with you. Social Security is on track to go insolvent in 2032. I mean, that's not far away. We're talking about six years from now. Most of us are going to be alive in six years, right? So this is a big problem. This is like a real problem for the majority of us. And here's the current update that I want to share with you. Social Security is forecasted to go insolvent in 2034. And then last year, the Social Security Administration revised the insolvency expectation date to 2033. Now they're saying insolvency in 2032. And I just want to say that this is a big issue because approximately 70 million Americans receive Social Security benefits. And last time I checked, the US population was about 340 million. So this affects a huge percentage of our population. Now, I want you to know that insolvency does not mean bankrupt in this situation. It means that if they don't figure this out by 2032, then all Social Security recipients, all beneficiaries are going to see their benefits reduced by 22%. Okay, so let me explain the situation. Right now, about two-thirds of baby boomers are retired. And the youngest boomers right now, they're about 62 years old. So currently, there's more money going out of the Social Security system to pay recipients than there's money coming in to fund the system. So what I'm saying is that there's a deficit. So the Social Security system is paying out more than it's collecting. But before, there was more money going into the system than there was coming out. And a surplus was being built up in the Social Security Retirement Trust Fund over the years. But now, because the system is at a deficit, the surplus is being drained away. And as more boomers retire, the deficit's just going to get worse. And the surplus is going to be depleted by 2032. And when that happens, well, there's not going to be any more money left. So all Social Security recipients are going to have to take a pay cut of 22%. That's because if Social Security recipients get paid 78% of what they're owed, then what the system collects and pays out is going to balance out. It's going to be basically at an equilibrium. So I hope that makes sense. So this is what we're dealing with. And now, we're seeing headlines like this in the media. Congress is finally talking about saving Social Security. Do you believe this is true? So the question that I'm asking you is, do you think that the politicians will become serious? They're going to try to solve this problem? They're going to try to fix this and take action sometime soon? Honestly, I'm just trying to be sincere with you. I am skeptical. I doubt that they're going to try to fix this anytime soon. Okay, why am I saying that? The reason why I'm saying that is because we have seen this before. If you don't know, I want to tell you what happened before. So I'm taking it back in time. The year is 1983. Social Security is basically in the same problematic situation. It's going to go insolvent in July of 1983. And then Reagan and the politicians, they passed legislation on April 20th of 1983, about two months before insolvency. So it was a bipartisan effort, meaning that both the Republicans and Democrats, they worked together to make the changes to prevent the Social Security system from going insolvent. And what were the changes? So the changes were that the full retirement age was increased from 65 years old to 67. More Social Security recipients had to pay taxes on their Social Security income or their benefits. They increased the Social Security taxes, meaning higher payroll taxes. More people are subject to Social Security taxes because certain federal employees were not subject, but then they were. And the cost of living adjustment, the COLA, was delayed by six months. So the solution was a combination of higher taxes and reduced benefits. So it wasn't like, oh, everybody's going to get a $500 monthly pay cuts. No, that's not what happened. But I mean, just think about it. If they increased the retirement age, then in my opinion, I see that as a reduction in benefits. If the government promises me like, hey, Brian, your full retirement age is going to be 67 years old. And then if they change it to 69, of course, I'm going to be upset. If you don't pay me for two years, then yeah, I'm going to see that as a benefit cut. And I want you to imagine a delayed cost of living adjustments. So Social Security recipients, they're probably going to get a 3 point something percent cost of living adjustment raise in January of 2027. But imagine if the pay raise was delayed until July of 2027. That would be ridiculous. And again, they raised taxes and they made more people pay taxes to keep the system solvent. So that's what they did last time to solve the problem, the same exact problem that we're in right now. Okay, so a very good question is when will the politicians actually take this seriously and actually fix this insolvency problem? Now, I just want to say that the timing of this problem, it's not ideal. Okay, what do I mean by that? Okay, so Social Security is going insolvent in the year 2032, right? President Trump is in office for the full year of 2028, right? So Trump's not going to care about the Social Security problem. Why should he? He's going to be out of office before D-Day. Then the next president is going to be in office from 2029 to 2032. So will the next president need to do something about it? And the answer is maybe, but most likely not. Okay, why do I say that? It's because the government can rob the disability funds and they could delay the insolvency dates until 2033. So that future president may not care so much, just kick the can down the road and dump the problem on the next president. So what is my expectation? I believe that they're not going to do anything right now. They're not going to do anything this year. They're not going to do anything next year. No. What are they going to do? Well, I believe that they're going to wait until last minute, 2032 or 2033. And the solution, I mean, it's going to be the same thing, benefit cuts and higher taxes. Okay, so let's predict, let's just map out how this is going to work just using common sense. Okay, so what is the problem? The underlying problem is that more money is flowing out of the Social Security system than there is money flowing in, right? And how does the system get back into balance? And I mean, it's got to be done soon over the next few years. It's not like we have 10 years of time. We don't have that luxury. So what are our options? Like one thing we could do is increase the worker base, basically have more people working so that more people are paying into the Social Security system, right? But here's the challenge, like how's that going to happen if we're focusing on kicking people out of this country and making immigration harder? Now, I'm not agreeing or disagreeing with the current policy. I'm just saying objectively that this is the current state of the situation. Like, do you think President Trump's really going to do a 180 on his immigration policies? Like really? Additionally, we have AI that's eliminating jobs. Fewer jobs means fewer people paying into the Social Security system. And of course, another option is to increase Social Security taxes, right? But I just want to say that that's a big ask, because if you're a salaried employee, then 6.2% of your paycheck goes to Social Security taxes already. And that's a lot. Like I want you to think about it. Did you know that that means that in a year, you work three weeks of full-time work just to pay your Social Security taxes? That's what 6.2% equates to. I mean, with all the income and payroll taxes, we're talking about federal, state, Social Security, Medicare, certain areas have locality income taxes too. Like some people are paying a tax rate of 50% all-in. That's not including all the other taxes. You know, sales taxes, property taxes, gasoline tax, etc. Okay, but let's just go at 50% of payroll and income taxes. If half your paycheck is going to the government, that means that in a year, you are basically working for the government for six months out of the year. And they're going to ask you to pay more. Like, have you ever thought of it from that perspective? And I just want you to know that self-employed people, they pay a Social Security tax rate of 12.4%. And for those people, I really recommend that they change their business structure to an S-corporation to reduce their Social Security taxes legally. You know, just some friendly advice. And then, of course, there's always the option of cutting benefits, reducing the outflow. Basically, if you pay the American people, if you pay Social Security recipients less, then it's going to delay the insolvency dates. It's going to save the Social Security system money. But I'll say that this would probably upset the American people the most. So it's my opinion that the government is trying to be sneaky by under-reporting the official rate of inflation. Because every year, there's a cost of living adjustment that's tied to inflation. If inflation is 6%, then Social Security recipients should get a 6% pay raise the following year. But if inflation is 6% and the government manipulates the numbers, like the CPI inflation reports, you know, this is just hypothetical, and they calculate the rate of inflation to be 3%, then 70 million Social Security recipients are going to get a cost of living adjustment of 3% next year, when they should have gotten 6%. So that's how the because clearly they're in a desperate situation. And can you audit the work of how the government came up with the rate of inflation? And the answer is no. Like how convenient for the governments. They don't release their data used to compute the rate of inflation because it's confidential. You can see the formula that they use, but you can't see how they got to the actual numbers. So what's the moral of the story? The moral of the story is do not rely on the governments for your financial well-being. Anyways, listen, I'm trying to help people achieve financial freedom. I wrote a book about it. I created a financial community to help people invest in the stock market. We're focused on long-term investing, which you can join for absolutely free, and we're doing really well. I'm going to leave a link for you down below if you're interested. Thank you so much, and I wish you a very nice day. Take care.