Offbeat: Why Social Security may survive longer than the government expects - PressFrom - US

OffbeatWhy Social Security may survive longer than the government expects

00:20  07 december  2018
00:20  07 december  2018 Source:

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Social Security could (in theory) survive forever. Yes, your benefits may indeed be taxable by the federal government (and 13 states, for that matter). The debate moving forward shouldn't be centered on whether Social Security will survive .

The Trustees report estimates that Social Security will continue to generate more income than it pays out in benefits through 2021. But beginning in 2022, and each subsequent year thereafter, the cash outflow from the Trust will be higher than the total revenue generated for the program.

Why Social Security may survive longer than the government expects

Social Security might have a shot at surviving for another generation — and that’s thanks to 78.1 million individuals who will be contributing to it.

These 78.1 million individuals who come after millennials and were born after 1997 make up what is known as Generation Z.

Morgan Stanley says it is more optimistic about the impact of Generation Z than the Congressional Budget Office.

The Wall Street firm’s more bullish assessment on labor-force participation in particular means that its view of potential GDP by 2040 is above the CBO’s by 2.4% to 4.3%. Morgan Stanley says the CBO is understating potential labor force growth by between 0.2% to 0.3% per year in the 15 years through 2040.

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That person must have worked long enough under Social Security to qualify for benefits. The number of credits needed to provide benefits for survivors depends on the worker's age when they die. No one needs more than 40 credits (10 years of work) to be eligible for any Social Security benefit.

Social Security is here to help you secure today and tomorrow with financial benefits, tools, and Some of the Social Security taxes you pay go toward survivors benefits for your family. When an income earner dies, certain members of the family may be eligible for survivors benefits, such as

While this may seem like a small variance, given that the continued funding of Social Security depends upon the number of people working, the variance has tremendous implications.

Currently, there are approximately 58 million beneficiaries receiving monthly Social Security payments averaging $1,249.55 . As of now, Social Security is funded through 2034, according to the Social Security Administration.

According to the Morgan Stanley report, the increase in the expected number of workers may allow Social Security to remain alive well beyond 2034.

If Morgan Stanley is right, the Social Security trust fund reserves may become depleted in 2062. It likely will delay the date of depletion for Medicare funds as well, the report said.

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Why the Heck Are Social Security Benefits Taxable? Chances are you'll owe tax on some portion of your Social Security benefits. Here's why.

The government determines your Social Security benefit based on your earnings record. You’ll need to report your expected earnings to Social Security every year, and it’ll adjust your payments accordingly. Workers who get a government pension may be in for a nasty surprise at retirement.

A secure , comfortable retirement is every worker's dream. And now because we're living longer , healthier lives, we can expect to spend more time in retirement The three major elements of your retirement portfolio are benefits from pensions, savings and investments, and Social Security benefits.

“Extending the deadline would likely push action off until the new depletion date, therefore removing the near- to medium-term prospects of raising the payroll tax, raising the taxable maximum to cover more or all earnings, raising the retirement age, and/or decreasing benefits,” the report says.

The Morgan Stanley report, if it’s right, also would provide a floor to stocks and interest rates over the long term.

The most obvious benefit, the firm says, is the tailwind to sales growth. “To the extent the rise of Gens Y and Z in the labor force support a higher potential GDP growth rate in the U.S., this relationship would indicate a modestly higher potential longer-run growth rate for corporate sales and earnings,” the report said.

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This is interesting!