by: Jinky C. Mesias
There have been so many reports confirming the distressing state of the finances of Social Security and so many members by now are wondering if they can really get the benefits that are due to them when their time to claim for such benefits arises.
In spite of the financial crisis that the Social Security is facing today, the Social Security Administration is confident that it can pay all benefits that are due to their members. They assured further that there would be no cuts on the benefits to be received by the current retirees but rather there would be a yearly increase on the benefits due to cope with inflation.
There are also so many reforms planned to be implemented in Social Security including those set forth by the President’s Commission that would further strengthen Social Security. The reforms are also set to ensure that scheduled benefits, including cost of living increases for would-be retirees. Moreover, the reforms will not reduce the benefits of currently disabled Social Security members as well as disabled beneficiaries.
However, in spite of all the reforms to be made in the Social Security Administration there is still the present problem in terms of finances since there is a foreseen 26% reduction in the benefits to be given for future Social Security retirees and unless the social security administration does something to diminish such problem then there would be an expected continuous reduction every year in the scheduled benefits.
The Social Security although offering retirement benefits should never be considered as a sole source of income in retirement. It is much better to have other retirement plans to further ensure that you leave comfortably when you retire. Besides having Social Security as a sole income retirement option is like sitting on a one legged chair and that does not imply stability. It’s always wise to have other options in case the Social Security Retirement benefit cannot fully suffice the entire needs of the retired member.
But just how the Social Security gets its funds? The fund of the Social Security is procured by means of the payment of the tax payers who are paying for their own benefits. The fund contributed by these tax payers is the one utilized for the payment of present benefits like payment for the retirement income of retiring members. However the excess in the fund is invested in a special-issue treasury bonds. And this is how the Social security earns additional funding for the next recipients of social security benefits.