It seems that someone is always saying that Social Security is about to go broke or go away. Some people claim their benefits at an early date for fear that the system will vanish. Social security expert Brian Doherty says that Social Security is here to stay. He explains why in this report.
Doherty says a worst case scenario would be that Congress takes no action to shore up the system or to increase its funding. Should that happen, Doherty says, the crunch date will be 2033. If nothing changes, benefits would have to be cut by about 25% in that year. However, after such a cut, Social Security would be on a very sound footing and could meet all obligations for the next 100 years.
However, there are a few things that could be done before then to put Social Security on sound financial footing. One thing has to do with the FICA tax rate that most Americans pay. The rate is 6.2% of earnings Doherty says that if that tax rate were increased to 7.7%, the additional revenue would put Social Security in sound condition for the next 75-100 years.
A second option has to do with the cap on the amount of earnings that are subject to tax. Currently, Doherty says, the cap is at $118,500. Earnings above that amount are not subject to tax. The cap only affects about six percent of all earners. If that cap were simply removed, that step would also generate enough additional revenue to sustain Social Security for the next 75-100 years.
Brian Doherty is the author of a new book “Getting Paid To Wait,” which reveals his groundbreaking strategy on how to maximize Social Security benefits. He is a nationally-recognized expert on Social Security claiming strategies and a top-rated speaker and media commentator on this topic. He began his career as a financial advisor with Dean Witter. He is President of Filtech, a consulting company specializing in Social Security claiming strategies. The Legal Broadcast Network is a featured network of the Sequence Media Group.