Officially, Social Security has enough money to pay all its promised benefits until 2033. But a new study suggests this forecast could be wildly optimistic. And that spells big trouble for future retirees. Every year, the Social Security Administration releases its Trustees Report, which projects the program’s solvency — how much it will take in, how much it will pay out and how long the “trust fund” can cover revenue gaps — over the next 75 years.
The latest report says that Social Security can meet its financial obligations for about 18 more years. After that, the trust fund will be exhausted, and payroll taxes won’t cover nearly all the benefit costs. That’s bad enough. But a new study by researchers at Harvard and Dartmouth shows that this day of reckoning will almost certainly come far sooner than that.
Rising life expectancy and declining fertility spell doom for the Ponzi Scheme, which is based on an inter-generational wealth transfer from workers to retirees. In other words, your SS payments have already gone to support your parents, and it will be your children’s generation that supports you.
A report released last week by the Urban Institute found that millennial women are reproducing at the slowest pace of any generation in U.S. history. Childbearing fell steeply in the years immediately following the “Great Recession,” with birthrates among women in their 20s declining more than 15 percent between 2007 and 2012.
So here’s my suggested fix:
If you voluntarily choose not to have children, you forfeit your Social Security benefits. It’s only fair.