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Social Security

*Previously published in The Ponte Vedra Recorder newspaper, Ponte Vedra Beach, Fl

Recently there have been numerous press announcements regarding the Social Security program. The issue underscoring these releases is whether Social Security will run out of money, and when. Let’s explore that question a bit further. Social Security was created in the 1930’s as a supplemental retirement system, intended to augment the retirement income one would receive from a company pension and/or from one’s savings. During the first 70 years the program was in place, the tax revenues collected were greater than the payments being made, creating a surplus. In recent years, payments have outstripped tax collections, therefore requiring withdrawals from the surplus. Based on current projections, the Social Security Trust Fund (the surplus) is estimated to be exhausted around 2031, thereby requiring either a cut in benefits or a subsidy from the Federal government (i.e., from all of us who are taxpayers).

It’s my belief that there is no easy or simple solution to the issues related to the Social Security problem. I do, however, believe that the current situation is rooted in these two problems that have not been properly addressed:

  1. Disability benefits were added to the Social Security program some time after the program started. Unfortunately, there was no mechanism put in place to pay for this additional benefit. Over the years, the number of people collecting Social Security disability benefits has mushroomed, creating a significant strain on the retirement benefit program. We need to either create a new revenue source to pay for disability benefits, tighten the requirements to receive such benefits or both. Don’t get me wrong; I am all in favor of those who truly need disability benefits to continue to fully receive them. Unfortunately, there are far too many cases of those who are abusing the system, and not enough checks and balances in place to prevent this from happening.
  2. The government made a major mistake, in my humble opinion, when it raised the age for full benefits from 65 to 66 or 67 (depending on year of birth), but did not raise the age for reduced benefits from 62 to 63 or 64 (keeping the 3 year spread). Keeping the age for reduced benefits at 62 has encouraged millions of people to retire earlier than they would have otherwise, which converts them from paying into the system to withdrawing from the system.

The good news is that modern medicine is keeping us healthier and living much longer than ever before. The bad news is, when Social Security was enacted no one dreamed that so many Americans would live to be well into their 90’s and beyond. The sooner changes are made in the system, the less likely we are to face either a significant benefit cut or the need for a massive subsidy which will most likely raise taxes for everyone. If ever there were a critical need for planning, this is it. Our firm specializes in retirement planning and we welcome your inquires related to your individual needs and concerns.

Frederic “Ric” Schilling is a Florida native, born in Jacksonville, Fl. Ric is President of Senior Guardians of America, a local North Florida firm specializing in tax reduction, long term illness planning, asset protection, probate avoidance and life income planning. Ric is a National Speaker and Advocate on Senior Issues and has been featured by the Florida Times Union and WJXT, TV-4 in Jacksonville as an authority on Estate Planning and Retirement Issues. Senior Guardians has an A+ rating with the Better Business Bureau and is a member in excellent standing with the National Ethics Association. You may contact Ric at: 904-371-3302 or 888-891-3381. Please visit:

This article is not intended to give tax or legal advice. Securities offered through Center Street Securities, Inc.(CSS), a registered Broker-Dealer and Member of FINRA & SIPC. Senior Guardians is independent of CSS.