Is a New Ice Age Threatening the Security of the Golden Years?

Retirement: a term that conjures images of sunny beaches and cocktails with little umbrellas. However, many retirees could soon face a major problem: What happens if Social Security exhausts its reserves? According to forecasts, this could happen in as little as ten years if Congress does not act. An independent oversight group predicts the Social Security Old-Age and Survivors Insurance Trust Fund (OASI) could be depleted by 2033. If this occurs, dual-income couples retiring this year could lose between $10,000 and $21,800 in annual benefits. Former President Donald Trump and Vice President Kamala Harris have both promised to protect the Social Security system. However, neither has presented concrete plans for effective measures, as reported by the Committee for a Responsible Federal Budget (CRFB) in a blog post on September 5. The CRFB also highlighted that Trump's proposals could exacerbate Social Security's financial situation. His idea to eliminate the partial taxation of Social Security benefits would increase the Social Security deficit by 25% over 75 years. To avert the looming crisis, political intervention is needed, which may include raising the retirement age or expanding payroll taxes—measures that do not generate much enthusiasm. American life expectancy has increased significantly since the Social Security Act was passed in 1935. Today, men live on average to 74.8 years and women to 80.2 years. Longer lifespans also mean longer retirement benefits, imposing strains that were not accounted for in the program's original design. However, lawmakers are hesitant, as any adjustments to the Social Security system could potentially upset voters. Since the 1980s, Social Security has been considered a sensitive political issue in the US—a safe strategy has always been to postpone decisions, a strategy that is now reaching its limits. The CRFB categorizes retirees into three income groups: low, middle, and high. If the OASI fund is depleted by 2033, single-earner couples could face income losses of up to $16,300, while losses for dual-income couples could range between $10,000 and $21,800.