For all the debate surrounding the upcoming presidential election, there's one topic not receiving nearly enough attention: Social Security. Or to be more specific, Social Security's rapidly approaching shortfall.
The program originated as a safety net to help senior citizens whose savings and pensions were decimated by the 1929 stock market crash. Today, it has promises to pay out $41.4 trillion in future benefits, using today's dollars. The problem is that it has just $34.5 trillion in assets and expected income to cover those promises.
The most recent estimates predict Social Security's trust funds (those assets accumulated during a surplus of contributions) will start running a deficit in 2022, thanks to recent payroll tax cuts and the coming surge of baby boomer retirees.
House Speaker John Boehner (R-Ohio) even declared the program is "already facing imminent bankruptcy," giving even more urgency to an issue that 48% of Americans worry "a great deal about," according to Gallup research.
So Why Aren't Obama and Romney Talking About It?
The problem is that there are only two feasible options to keep Social Security solvent: either cut benefits or raise taxes (or some combination of the two).
- Cutting benefits means either reducing payouts or pushing the eligibility age even further out (the option Mitt Romney favors).
- Raising taxes could either come as an across-the-board increase or targeted solely at the nation's highest earners (the option Barack Obama favors).
Yet neither of these scenarios is an easy idea to sell -- however necessary it might be. (We've duked it out on both options on DailyFinance.) And that's why, even though Obama and Romney have talked about it, neither are focusing a significant portion of their campaign platform around it.
Time to Take Matters Into Your Own Hands
This is blatant proof that we simply can't trust politicians to prioritize fixing the Social Security debacle. But rather than dwell on their inaction, it should encourage us to do all we can on our own to ensure a wealthy retirement.
This means taking advantage of hidden Social Security loopholes, maxing out tax-advantaged retirement accounts, setting a fixed budget that you follow, and investing wisely. All so that when the time comes to transition from a life of punching the clock to enjoying your golden years, your finances will be safe and secure -- regardless of what the government ultimately decides.
This article was written by Motley Fool analyst Adam J. Wiederman. Click here to read a free report he wrote on how to ensure a wealthy retirement, including tips on how to boost your Social Security checks -- by as much as 25%.
- When Is the Right Time for You to Start Taking Social Security?
- What Mitt Romney Knows About Social Security That You May Not
- Point: The Complete Overhaul Social Security Needs to Survive
- Counterpoint: Social Security -- It Ain't Broke, So Don't Break It