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Why do so many misunderstand how to fund Social Security?

On Behalf of | Jun 24, 2013 | Social Security Disability

There are many complex elements about Social Security, such as completing a successful application for Social Security disability insurance (SSDI) benefits, that we are always a little bit disappointed when we read article about Social Security and its funding issues and they misunderstand fairly simple concepts. The annual release by the trustees of the Social Security trust fund is often an occasion for these “misunderstandings” to come to the fore.

For the last few decades it seems, every year, when these reports are released, we see the same tired articles discussing how Social Security won’t survive and most workers today will never benefit from the money they have paid into the system. Because the current funding levels are set so more money goes out than comes in, the trust funds will be exhausted, for SSDI, 2016 and 2033 for old-age and survivors insurance (OASI). 

This does not mean Social Security vanishes, but instead, if Congress fails to act, would mean that the Social Security Administration (SSA) would need to reduce the payment of benefits by 23 percent. While this would be critical for many recipients, it is very different from zero, and this only happens if Congress does nothing.

SSDI benefits can be preserved by as reallocation of funds from the OASI trust, an action that has occurred before in the past to remedy just this type of situation. Congress could also raise the amount of tax paid into FICA.

If you have a really complex problem, like needing to apply for SSDI in Ohio, contact us and we can help with your application. For simple problems like the shortfall to the trust funds, write your congressional representative and tell them to fix the funding. 

Source: Rrstar.com, “Government can’t adequately project the needs of entitlement programs,” Ted Biondo, June 23, 2013