You’ve probably been paying in Social Security and Medicare tax for some years now. Contrary to public opinion, it’s not sitting in a vault somewhere, waiting for the day the money all comes back to you.
Instead, it’s cash-in, cash-out deal with the excess cash that has been collected going to fund the general fund.
We often talk about the Social Security deficit, but in reality it’s Medicare that is the biggest issue. That’s because people live longer these days and that means more medical care is needed and medical care costs a whole lot more than it used to.
At least that was what we used to worry about. We knew that Social Security was going to reverse as more Baby Boomers retired, but that wasn’t expected until sometime in 2016 – 2020. Until then, there would be enough coming in every year to cover the current year Social Security payments that needed to be made.
Then the recession hit. Fewer people are employed and paying into Social Security. And now there isn’t enough money to cover Social Security, starting in 2010.
This week we’re going to look at what that deficit means for you, even if you don’t have any intention of drawing Social Security in the near future.
Here’s an interesting article for additional information about the new report regarding Social Security: