1. “Long-term deficit? We can hardly afford our bills today.”
About a third of workers in their 50s expect Social Security benefits to be their primary source of income in retirement, according to the Transamerica Center for Retirement Studies. That reliance gives pre-retirees reason to worry about the future of the program. The Social Security Administration itself has said that unless something is done to reform the system, it will have to reduce benefit payments to retirees within the next few decades.
Less talked about, perhaps, is the concern that the program is having a hard time paying its bills today. In 2010, the Social Security Administration began collecting less revenue in taxes than it needs to cover benefit payments, forcing the agency to tap its $2.7 trillion trust fund sooner than some had expected. It was the first time since 1983 that expenditures had exceeded noninterest income, and the shortage is expected to continue. “It’s almost like a family running huge deficits throughout their budget,” says Eugene Steuerle, an economist with the Urban Institute, a nonpartisan think tank in Washington, D.C.