Social Security Benefits Aren’t Earned If You Didn’t Pay For Them

Social Security has been around for a long time. It is a vital program that has become the financial lifeline for many Americans and when you consider its intended purpose, too many Americans.

According to the SSA, in 2019 among elderly Social Security beneficiaries, 50% of married couples and 70% of unmarried persons receive 50% or more of their income from Social Security. Among elderly Social Security beneficiaries, 21% of married couples and about 45% of unmarried persons rely on Social Security for 90% or more of their income.

A short history of why we can’t fix Social Security.

Americans themselves preferred to kick the can down the road. It wasn’t that they were unaware of the choices.

In a 2005 Gallup poll, 62% of Americans acknowledged that it was impossible “to ensure the long-term future of the Social Security system without either raising YOUR taxes or cutting YOUR Social Security benefits.”

And 8-in-10 Americans in 2005 agreed that reform was needed either in the next one-to-two years or in the following decade.

What was missing was a willingness by Americans to make sacrifices themselves. Only 37% of Americans in 2005 favored paying higher taxes themselves, only 29% were willing to accept lower benefits and just 35% supported raising the retirement age.

Source: Social Security Benefits Aren’t Earned If You Didn’t Pay For Them

In light of the above, consider what the 2005 Social Security Trustees Report said.

Annual cost will begin to exceed tax income in 2017 for the combined OASDI Trust Funds, which are projected to become insolvent (i.e., unable to pay scheduled benefits in full on a timely basis) when assets are exhausted in 2041 under the long-range intermediate assumptions. For the trust funds to remain solvent throughout the 75-year projection period, the combined payroll tax rate could be increased during the period in a manner equivalent to an immediate and permanent increase of 1.92 percentage points, benefits could be reduced during the period in a manner equivalent to an immediate and permanent reduction of 12.8 percent, general revenue transfers equivalent to $4.0 trillion (in present value) could be made during the period, or some combination of approaches could be adopted. Significantly larger changes would be required to maintain solvency beyond 75 years.

The projected trust fund deficits should be addressed in a timely way to allow for a gradual phasing in of the necessary changes and to provide advance notice to workers. The sooner adjustments are made the smaller and less abrupt they will have to be. Social Security plays a critical role in the lives of 48 million beneficiaries, and 159 million covered workers and their families. With informed discussion, creative thinking, and timely legislative action, we will ensure that Social Security continues to protect future generations.

The major difference between the 2005 report and the reality of 2020, is that the 2005 projections were optimistic. Annual costs exceeded tax income before 2017 and the trust will be exhausted about seven years sooner than projected.


  1. I think for this problem to be addressed, the SSA needs to change the annual statement where they estimate your benefit amount.

    To be fair, there is an asterisk stating that “Your estimated benefits are based on current law. Congress has made changes to the law in the past and can do so at any time. The law governing benefit amounts may change because, by 2035, the payroll taxes collected will be enough to pay only about 80 percent of scheduled benefits”. This is from my statement that was downloaded on 4-19-2020 before the trustee’s latest press release and now some post covid-19 projections are 76-79% payouts.

    The asterisk is probably not noticed by most people since it next to the benefit type on the left and not the amount on the right side of the statement. Most people probably cannot instantly visualize what 20% less really is. Why do the math since the SSA already put a figure for you to read. I think that instead of the asterisk, they should start putting the amount that you will collect after 2034. We are now close enough for people to see what they will collect in 14 years. It is very realistic for someone to start collecting at age 62 (today) and still being alive in 2034 and having their benefit cut at age 74 since the average male lives to 78.8 years old.

    For me, if I start collecting at “normal” retirement age of 67 (in 2029), SSA is projecting that I would collect $3049 a month. Instead of an asterisk, they should add another line stating stating in 2034, my benefit will be reduced to $2409. The loss of about $640 month or $7,680 year might get people to demand action.


    1. Good point. I wonder where they got 80% it was never 80% always between 75% and 77% . Any chance you could send me a copy of a statement. I have never seen that.


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