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Don’t Make Me Say I Told You So 21
Will Social Security Run Out?
It is highly unlikely that Social Security will go bust. Because the
government can simply raise taxes to make up the difference,
the odds are far more likely that taxes will rise dramatically in
the future in order to support Social Security. This could come
in the form of increased payroll taxes, income taxes, or both.
There are other options open to the government.
First, the age to receive Social Security benefits may be
increased. This idea has been kicked around for years, but it
appears to be gaining steam.
Other possibilities for dealing with these challenges are as
follows:
► Social Security payments could be reduced from current
levels.
► Tax revenue from other sources could be used to fund
benefits.
► They could cap cost-of-living increases (COLA).
► Social Security could become a “defined contribution”
type of account, in which participants could invest their
contributions into stocks and bonds similar to current
401(k) plans.
Chapter 1: The New Retirement
