Suze Orman cited these facts to ease fears about Social Security, urging Americans to “wait until their early 60s” before claiming
There are widespread concerns about the sustainability of social security programs.
According to the Congressional Budget Office (CBO), Social Security Old Age and Survivors Insurance (OASI) trust fund reserves will be exhausted by the end of fiscal year (FY) 2033, and the combined Social Security Trust Fund (OASDI) will be insolvent by the end of 2034 .
That leaves only nine years. Not surprisingly, these headlines have caused some anxiety among workers whose every paycheck is deposited into the fund.
In 2023, financial expert Suze Orman attempted to allay these concerns with a post on LinkedIn. “The payments won’t stop,” she promised.
Here’s why the personal finance guru thinks Americans should be less pessimistic about the fate of the social safety net.
The biggest reason Orman isn’t worried about running out of reserves is that it won’t stop Social security payment, in simple terms reduce them. “The worst-case scenario is that earned benefits would need to be cut by about 25% to deal with the cash shortage,” she said.
This is also the conclusion of the CBO. The office estimates that by 2034, the OASI Trust Fund will have sufficient dedicated revenue to pay 75 percent of scheduled benefits.
Orman also pointed out that this is not the first time that the social security system has faced tightening. trust fund just three months In 1983, President Reagan and Congress jointly reformed the system to avoid resource depletion.
“One of the biggest changes at that time was the gradual increase in the full retirement age, where you are entitled to 100 percent of your benefits, from 65 to 67,” Orman explained. This helps maintain the solvency of the fund.
She expected similar reforms could have an impact on retirees and people over 55, but to a lesser extent than younger workers.
While taxpayers cannot control legislative changes or funding, they can control when benefits are received. “You can take your pension anytime between 62 and 70. Every month you delay it, you get a slightly higher benefit,” she said.
She recommended that higher-income and relatively healthy workers wait as long as possible to maximize their benefits.
