Although the Social Security system’s future is uncertain, experts say delaying Social Security is still a useful strategy for optimizing retirement funds. According to Kirsten Hunter Peterson, vice president of workspace deliberated leadership at Fidelity Investments in Boston, “at Fidelity, we say if you can afford to wait to claim Social Security until age 70, you should seriously consider that as an option.” It might be your best choice, she suggested. The Social Security payout system is greatly relied upon by a large portion of Americans.
Social Security: Primary Source of Retirement Income
As per the 2022 Retirement Confidence Survey of Employee Benefit Research Institute, 94% of retirees and 84% of U.S. workers, respectively, said Social Security is their primary source of retirement income at the moment. However, the system’s future is uncertain, and there is a limited window of opportunity to resolve looming insolvency.
The Social Security & Medicare Boards of Trustees estimate that Social Security will run out of money in 2035. In that case, the system would only be able to cover around 80% of the planned benefits.
Whether it’s Social Security or Medicare, many of the federal programs that people plan for and depend upon in retirement are fraught with uncertainty, according to Ms. Hunter Peterson.
Several lawmakers in Washington have put forth legislation to reform the Social Security program, and several Republican candidates have suggested privatizing Social Security.
A Significant Change
52% of workers and 69% of pensioners are at least somewhat optimistic that now the Social Security system would remain to provide benefits of at least equivalent value to those received by seniors now, according to EBRI’s 2022 survey
. This represents a significant change from the survey of 2018 when only 28% of employees and 45% of retirees had this opinion.
The belief in the Social Security system was less during past Republican administrations, according to Craig Copeland, director of wealth benefit research at EBRI in Washington, because there was greater speculation of benefit reductions.
However, he claimed that since Joe Biden assumed office, people have had greater faith in government initiatives like Social Security. According to Mr. Copeland, “it appears that people still comprehend & think that (Social Security) would be a foundation of their retirement” reports Pionline.
