TRANSCRIPT:

Will Social Security be there when you need it? It’s a question that looms large for many Americans planning their retirement. Let’s delve into the current state of social security and what the future might hold. Hi, I’m Hunter Brockway, founder of Boca Retirement Strategies, here to guide you to a successful, stress-free retirement while spending more and avoiding being killed in taxes.

According to the 2024 trustees report, the Old Age and Survivors Insurance (OASI) trust fund is projected to pay full benefits until 2033. After that, incoming revenues are expected to cover about 79% of scheduled benefits. When combined with the disability insurance trust fund, the overall system, known as OASDI, is projected to pay full benefits until 2035 with about 83% coverage thereafter.

While these projections might sound concerning, it’s important to note that Social Security isn’t going bankrupt. The system will continue to receive substantial income from payroll taxes, which in 2023 amounted to $1.233 trillion.

To address the projected shortfall, several policy options are on the table. One proposal suggests increasing the payroll tax rate by 3.33 percentage points. Another considers reducing scheduled benefits by about 20.8%. Alternatively, a combination of these measures could be implemented to ensure long-term solvency.

This video got you thinking about your own retirement planning. I’d like to offer you something to help you see the bigger picture. We’ve created a tax-smart comprehensive retirement workbook for pre-retirees and retirees. If there’s one thing I’ve noticed in my years of working with individuals, it’s that there’s always at least one aspect in the planning process where they say, “Hm, I haven’t thought about that before.” No matter how smart they are, how much they’ve saved, something comes up, whether it be they realize they can spend more than they thought they could, they realize their tax bill is going to be high in retirement, or they are going to leave money on the table with their current social security claiming strategy. This workbook is designed to help you walk through the most critical areas of retirement planning with action steps, false beliefs, and areas for you to input your own reflection items. You can download the workbook by going to the link below in the description. If you have any issues with that link, send us an email at contact@boerretirement.com. If you get through this workbook and you’d like your responses reviewed or have any questions, I’m happy to have that conversation with you, too. As always, this is no cost, no obligation, and no pressure. Best of luck.

For current retirees, it’s reassuring to know that benefits are expected to be paid in full for the next decade. For those that are still working, it’s prudent to plan for various scenarios. Financial advisors often use planning tools to model potential outcomes based on different policy changes. I’ve heard of some retirees claiming Social Security sooner because they are concerned about Social Security running out of money. To me, that makes no sense because if it did, you’d be taking a cut on top of a cut from claiming early.

In summary, while Social Security faces challenges, it’s not disappearing. Staying informed and proactive in your retirement planning is key. For some of my much, much younger clients, we might say, “Look at Social Security as a benefit. Let’s plan on your savings being your main source of income. If Social Security is there, it’s a bonus.” For those who are retiring today, we look at this model, the projections of running low at 2033 and how that plays into their claiming age to create a Social Security claiming strategy. If you have any financial questions, want to know more about social security claiming strategies, you can email them to contact@bocaretirement.com.