Despite what pundits around the country are saying, Social Security is strong and can pay beneficiaries 100 percent of their benefits for the next 25 years – that’s the message attendees received at a special AARP New Mexico presentation on Social Security – “Is Paying into the Social Security system throwing your money away or helping to secure your future?”
See Also: 10 Things You Should Know About Social Security
The discussion, which outlined the basics of Social Security and how it works, was part of the New Mexico Coalition for Financial Education’s fifth annual financial literacy summit titled “Wealth: How to Get it, How to Keep it and How to Grow it”. The free event was held April 15 at the Hotel Albuquerque in Albuquerque.
“People keep hearing that Social Security is going broke – well, hardly,” said Bill Morrison, an AARP New Mexico volunteer. “Currently the trust fund has $2.4 trillion in it.”
“The trust fund comes from you and me paying into the system in anticipation of a comfortable retirement. Only benefits and administration can be paid out of the trust fund,” Morrison said.
There are several myths surrounding Social Security and one of those is that the Social Security trust fund only exists on paper since other parts of the government can borrow from the trust fund.
Morrison said that this is somewhat true but the trust fund is backed by the full faith and credit of the U.S. Government and therefore, the funds will not simply disappear – they are guaranteed.
Social Security was designed so that Congress could occasionally tweak the system as needed to adjust it for future generations. While the system is strong for the next 25 years and even after that would still be able to pay about 75 percent of promised benefits, some moderate changes need to be made to ensure the system stays strong for future generations.
Currently Social Security is available to all who pay into it. It not only provides a retirement income for those who are most vulnerable among our population, it also provides vital income to the middle class as well. But it is not just a system for the retired it also provides benefits for the disabled and those whose loved one has died.
“At this point and time, 63 percent of the people receiving benefits are retirees, 15 percent are disabled, 8 percent are children receiving survivors benefits, 5 percent are spouses and 9 percent are widows, widowers and parents,” Morrison said.
As lawmakers look at ways to reduce the deficit, AARP is taking a strong stand that cuts to Social Security are not acceptable.
“AARP maintains that Social Security has not contributed to the nation’s debt and as such should not be cut to balance the budget,” said Leonel Garza, who leads AARP New Mexico’s State Legislative Committee. “AARP believes that Social Security is a guarantee that when you pay in, you get the benefit you’ve earned. It is also important to remember that young adults have been paying into the system for years and also deserve the benefits they’ve earned. With the economy still causing havoc on pensions and people’s personal finances, people are depending on their Social Security benefits even more.”
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