Dear Rick:
Would you know how safe my Social Security monthly payment is? I do hope and pray that it is safe. I just want your opinion.

Thank you.
Judy

 
Dear Judy:
I have no doubt, whatsoever, that you will continue to receive your Social Security Benefits without cuts. When they talk in Washington about reforming the Social Security System it is clear that those changes (if they ever happen) would not affect those collecting or close to applying for Social Security. Therefore, you should have no fears that they’re going to take your Social Security away.

Although, for those who are collecting Social Security there is no fear that your benefits will be changed, there is a possibility that your Medicare premiums could continue to rise. As those of you who collect Social Security know, even though , there is a cost for Medicare B that is deducted from your Social Security Benefits. Over the years, premiums for Part B have risen faster than Social Security Benefits and as a result, some people find that their net Social Security check is lower than it was a few years ago. The reason is not because of cuts in your Social Security Benefits but rather, because of the increase in the premium for Medicare Part B.

For those of you in your early 50s or younger, what Social Security will be and what it will look like when you retire will be different than it is today. The current Social Security system needs to adjust to an aging population and the fact is that Americans are living substantially longer than they did in 1935 when Social Security was passed into law. Therefore, it is virtually inevitable that particularly for those in their 20s and 30s, if they do receive benefits, they will be substantially reduced – if nothing more than to reflect the change in life expectancy. Another change that is possible in the future that would not surprise me would be some sort of means test for Social Security. In other words, if people make over a certain amount they would see reductions in their Social Security Benefits.

I recognize that some of the future changes in Social Security won’t be fair. However, who said life is fair. If you’re in your 20s, 30s or 40s, the sooner you accept the reality that Social Security is going to change, the better it will be for you. By putting 10 percent of your money away for retirement and investing it wisely, you will be in much better shape to deal with whatever happens with Social Security. As I’ve always said, we live in the greatest country in the history of the world, but there’s nothing worse in this country than to be old and poor. If you think that in the future you’ll be able to live on Social Security alone you’re sadly mistaken.

Social Security is one of those issues that create lots of emotions when it is discussed. Particularly in this hyper-partisan world that we live in, we have to be cautious about listening to the partisan babble that comes from politicians and their supporters these days. Today with the popularity of social media, anyone can say anything whether it has a grain of truth or not. It used to be that we could at least trust the mainstream media to be accurate on the news it reports; unfortunately, that’s not necessarily true today. Therefore, you need to use caution before you react to a news story, to social media, or even to politicians. One thing that I’ve learned is that just because you read it in the newspapers and see it on TV doesn’t make it so.

Good luck!

 
If you would like Rick to respond to your questions, please email Rick at rick@bloomassetmanagement.com