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The Vast Majority of Workers Trust Social Security. Should You Do It?

Workers are remarkably sure that when they retire, Social Security will be there for them.

According to the Employee Benefit Research Institute and Greenwald Research’s Retirement Confidence Survey 2022, 52 percent of workers are “somewhat” or “very” confident that the Social Security system “will continue to provide benefits of at least equal value to the benefits received by retirees today?”

This is just one percentage point lower than last year’s figure, which was the highest in the survey’s 30-year history.

In 1994, the corresponding number was 22%, while in 2014, it was 28%.

The drumbeat of terrifying tales concerning the financial stability of the Social Security Trust Fund in recent years explains why workers’ faith in Social Security has been going upward.

The Social Security Board of Trustees, for example, predicted that the Old-Age and Survivors Insurance and Disability Insurance (OASI and DI) Trust Funds would be empty in 2035, with just 79 percent of benefits payable.

The fact that this study was released approximately a month after the COVID-19 outbreak put the US economy into the functional equivalent of a medically induced coma was purely coincidental.

social security

The Social Security Board of Trustees is obligated by law to report on the financial condition of the trust funds every year. And their evaluation in the 2020 report remained substantially unaltered from the previous year’s, if not more positive in some ways.

However, nuance isn’t uniformly regarded as a virtue in the financial press. Readers are drawn in by Chicken-Little-like proclamations about the sky about to fall.

Alarmist Social Security headlines received a lot of hits since the pandemic predisposed many people to believe the world was about to end. When the 2019 Social Security Trustees report was released, I don’t recall receiving any emails from readers, but I was inundated with them once the 2020 report was released.

Studies have shown that alarming Social Security headlines cause retirees to change their minds. For example, last October, I wrote about research on seniors’ decisions about when to start claiming Social Security payments.

The researchers discovered that, on average, more alarmist headlines resulted in an earlier claim determination.

So it’s a nice surprise that the last couple of years of apocalyptic headlines haven’t convinced more workers to forego Social Security.

Should we, nevertheless, have faith in Social Security?

Of course, the more essential question is whether employees should have faith in Social Security, not whether they do. I believe such confidence is justified—for a few of reasons, as I have stated previously.

To begin, it’s critical to put the expected Social Security Trust Fund depletion date in the 2030s into historical context. However, the timing of this depletion date isn’t really breaking news.

After Congress made the latest improvements to Social Security’s finances in 1983, actuaries predicted that the trust fund would be able to satisfy all commitments until the mid-2030s. As a result, we’ve known for four decades that repairs will be required before then.

There is no longer a “crisis” in Social Security finances, as there has been since the mid-1980s.

Second, it’s instructive to consider how long our politicians dragged their feet the last time the Social Security system was on the verge of bankruptcy.

The earlier depletion date occurred in July 1983, and the date had been known to Social Security’s actuaries for many years. The Social Security Amendments of 1983, which bolstered the system’s financial stability, were not ratified by Congress until April 20 of that year, and then-President Ronald Reagan signed them into law.

In other words, the system was not corrected until less than three months before the deadline.

It’s safe to assume that politicians will wait just as long (or even longer if feasible) this time. It’s impossible to get anything passed these days due to intense polarization.

Nonetheless, political gurus from both parties believe it’s nearly impossible to imagine our elected officials allowing the Social Security Trust Fund to run out of money.

Even if they did, the majority of claimants’ Social Security benefits would still be paid. According to the most recent projections from Social Security actuaries, even if the trust fund is unable to pay 100% of the benefits to which beneficiaries are normally entitled, it will still be able to pay 76% of those payments. That’s not ideal, but it’s better than nothing.

In addition, Martha Shedden, co-founder and president of the National Association of Registered Social Security Analysts, told me in an interview that even if only three-quarters of scheduled benefits are paid, Social Security will continue to be the primary source of income for many, if not all, retirees.

Even if you felt our politicians would allow the Social Security trust fund to become unable to pay 100 percent of benefits, it’s unclear how your retirement planning would change.


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What’s the bottom line? We face far more serious and immediate retirement funding issues than what may befall Social Security’s finances in the 2030s. Workers’ confidence appears to be warranted in this current Retirement Confidence poll, at least.

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