Amey Stone posted in our Makeover Series that:

"I'm 42, so if I start collecting Social Security at age 67, that will be 25 years from now, or 2033. That puts me and my age group right at the sweet spot where we face real worry that our Social Security benefits could disappear just when we're starting to count on them."

That is actually a myth that some people have been using for political advantage to scare the folks who are now in their 30s and 40s. Don't worry Amey. It's not true. Let me set the record straight.

Right now 100% of all Social Security benefits are paid by income to Social Security from Social Security taxes and will likely be again in the future after the Baby Boomer wave has moved through the system. In fact only about 85% of current income goes to paying benefits and about 15% goes to building up the Trust Fund.

Changes were made in the early 1980s to build this Trust Fund for the Baby Boomer period when there would be more people collecting SS than paying into it. By the time the Trust Fund runs out of money most of these Baby Boomers will be dead, so the amount being paid out in SS benefits would again fall to about the same level we have now. Trust Funds won't even be needed to pay benefits until 2017.While I do think there could be a shortfall, I think this shortfall is being overstated for political gain. Many economists, including the one heading the Congressional Budget Office now, believe any shortfall can be made up with about a 1% or 2% adjustment, which could translate out to a 0.5% to 1% increase in SS taxes for current folks and a 0.5% to 1% cutback in promised benefits for Baby Boomers. Yes, it's a somewhat painful fix, but it would guarantee the SS system for everyone for the foreseeable future.

Personally, I think this shortfall is even less than currently projected because I don't think the impact of people working longer and delaying retirement is accurately being factored in. Now with the stock market crash, I think the numbers of people working longer will be even higher. Also, the shortfall is based on a significantly smaller working population, but if that happens how would our companies continue to operate as they currently do? I think the current estimates do not accurately consider immigration and the number of immigrants that will be needed to make up for the shortfall in workers as Baby Boomers do start to retire in big numbers.

Even if the worst case scenario happens, the government will be able to pay 75% of all benefits based on the doomsday scenarios I've seen. So even the doomsayers don't predict a total loss of benefits.

As author of the Complete Idiot's Guide to Social Security and Medicare, I can guarantee you I have researched this deeply. Now if you want to talk about Medicare. That's a true crisis.

Lita Epstein is the author of more than 25 books including "Working After Retirement for Dummies."

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