Can you Count on Social Security as Part of Your Retirement? Yes. Here’s Why.

Social Security is in better shape than most people think.

As a young adult—almost forty years ago—I assumed that Social Security would be bankrupt by the time I was ready to retire. That was the word on the street. Today people who made that same assumption way back when are receiving their monthly checks. But that hasn’t quelled the dire rumors, which have circulated in one form or another since at least the 1970s.

In the latest version, we are told that we need more babies to support retiring Baby Boomers. Young women aren’t doing their job. It’s a tale of Social Security as an intergenerational pyramid scheme, with young people paying for benefits their elders only partially earned—and counting on an even larger cadre of youngsters coming up behind them to do the same. Like many viral stories, this one contains bits of truth mixed with exaggerations and drama that make the narrative more viral but ultimately leave people with a distorted sense of reality.

So what’s real?

Social Security will have a steady stream of income and outflow for the foreseeable future. For many years, the program took in more than it paid out. It built up a surplus called the Social Security Trust Fund that is now being drawn down. The latest projections say this fund will be used up by 2034. When it is gone, Social Security will not be bankrupt, nor do economists or retirement planners (or Social Security’s board of trustees) see bankruptcy as a risk at any time in the foreseeable future. That is because the program has ongoing income from payroll taxes. However, when the trust fund is gone, projected revenues will cover only 75-80 percent of scheduled payouts, so if nothing else changed, projected payouts would have to be decreased by 20 to 25 percent. That’s a big deal for people counting on Social Security, but it’s a long way from bankruptcy, and some simple, sensible fixes would close the gap.

But what about the 16.8 trillion dollar shortfall that I’ve read about? Every year the Social Security trustees complete an analysis that projects program revenues and commitments 75 years into the future. The multi-trillion dollar shortfall is the gap between what Social Security would take in and what it would pay out by 2096 if no assumptions changed and if Congress did nothing to close the gap between now and then. Those are big ifs. To put it another way, the number derives from projecting deficit spending that hasn’t started yet for almost three quarters of a century assuming that nothing changes in that time. It is a valuable management tool, but an unlikely map of what is to come.

So, what are the two “simple, sensible” fixes that would close the gap? Both “fixes” would course-correct ways that Social Security has drifted out of alignment with changing conditions. At the end of the 1930s, when the program started, only 54 percent of adult men and 61 percent of adult women lived to age 65. By 2015, those numbers were 80 percent and 88 percent respectively. For those who do reach 65, additional life expectancy has increased by five years, but the Social Security benefit age has increased by only two, to 67. People not only live longer, they are healthy longer. Research shows that many people in their late 60s are as healthy and capable as younger workers and, paradoxically, retirement can have negative health and mental health effects. So, the first correction would be to gradually raise the benefit age to 70 and then add a formula that adjusts that as health and life continue to grow longer.

The other fix would be to raise the cap on wages that are subject to withholding. Currently Social Security gets withheld from earnings up to $142,800 in a year. Additional earnings beyond that cap do not have social security withheld. That is because Social Security was meant to be a forced savings program that returned a basic level of income during retirement. In 1983 roughly 90 percent of wages were subject to Social Security withholding, with 10 percent above the cap. But as inequality has grown, a greater percent of wages escape withholding. By 2016 that number was 17 percent, meaning 1.2 trillion dollars in wages to high earners were exempt. In addition, life expectancy has risen more for rich than poor people, which means that higher income people draw from the program longer. So, again, raising the cap would correct one of the ways that income and outflow have drifted apart because of changes in our society.

If these changes are so simple, why haven’t they been done? The problems are political. The Left wants to close the gap by increasing contributions from high income earners. They want to raise or eliminate the cap. The Right wants to close the gap by raising the benefit age. Neither side wants to offend their core constituents, who have become accustomed to unsustainable payouts or unsustainable tax exemptions.

Many other possible tweaks to Social Security could help to either improve finances, or bring Social Security into alignment with modern ways of living, or both. For example, we could revise cost-of-living formulas to better reflect the changing mix of technologies that people use to maintain quality of life. Also, because Social Security was set up when most people married and most women didn’t work, it offers benefits to married or widowed women that aren’t available to singles. This is regressive.

Lists of proposed improvements to Social Security can be found all over the internet (here, here, here, here, here, here). Some have been carefully thought out by analysts; others not so much. But even the well-considered proposals face resistance from one or the other side of the aisle, and as polarization deepens, neither side has been willing to compromise. The last major overhaul of Social Security was in 1983. But pressure is mounting and reform legislation—the TRUST Act—may pass this year. As conflicted as this topic is, politicians know what would happen in elections if expected benefits suddenly dropped by a quarter because of their failure to update the program.

What about the “looming birthrate disaster” we’ve been hearing about, the idea that we won’t have enough young workers to support the old? It is neither looming nor a disaster, but this part is real: Young women are having fewer babies and people are living twice as long as they did 100 years ago. Alarmists of many stripes—nationalists, religious pro-natalists, immigration advocates and some others—have been prophesying doom, including for old age security programs. It is also true that for a long time the failure of politicians to reform and update Social Security was offset by rapid population growth. So, the notion of the program operating currently as an intergenerational pyramid scheme is not altogether baseless.

But people who say we need an ever-larger cadre of young workers to grow economic production (and, thus, funding for safety net programs like Social Security) have either misread or haven’t read the economic research. Improvements in productivity (and take-home pay and standard of living and per-person funding for social programs) are driven primarily by innovation and the spread of better technologies. Across many countries and time periods, faster population growth maps to slower growth in per person productivity and standard of living. Rapid change of any kind tends to make adjustment difficult, but gently declining birthrates may help workforces adjust to coming trends like AI and robotics.

The trustees of Social Security already project a below-replacement birthrate in their long-term analysis, though they will continue to review and revise. Like other demographers, they assume that 20th century population growth was anomalous and won’t continue indefinitely. (It would be hard to imagine a planet where it did.) That said, experts don’t know how these changes will play out. Retirement security programs will need other foundations, foundations that don’t require population growth, if they are to remain strong long term. The Social Security Administration tracks similar programs in other countries to monitor what works well.

Why it is important to get the facts right.

Misperceptions about Social Security are worth correcting because they harm individuals and society at large. When people wrongly believe that Social Security is headed for the rocks—that it is going bankrupt, or that experts don’t know how to fix it, or that young workers are about to be overwhelmed by burdensome retirees—many feel more anxious or resentful. Their own future seems insecure, and their withholding seems like money down a black hole rather than the savings plan it was meant to be. They may be more mistrustful of government broadly, less confident that tax dollars will be spent wisely for their good and the good of other people.

Fortunately, things are better than many of us have been told. Barring catastrophe (in which case we all will have bigger things to worry about), Social Security is going to be around for a long time. True, the system needs updating, and if politicians fail to do their jobs some adjustments will be painfully abrupt. And we are no better now at predicting the future than our ancestors were 85 years ago when the program started. It would be silly to assume that we actually know how things will or won’t work in 75 years. We can be confident that future generations will need to revamp to fit changing conditions, just as we do now. But overall the program is doing what it was meant to do.  

Valerie Tarico is a psychologist and writer in Seattle, Washington. She is the author of Trusting Doubt: A Former Evangelical Looks at Old Beliefs in a New Light and Deas and Other Imaginings.  Her articles about religion, reproductive health, and the role of women in society have been featured at sites including The Huffington Post, Salon, The Independent, Quillette, Free Inquiry, The Humanist, AlterNet, Raw Story, Grist, Jezebel, and the Institute for Ethics and Emerging Technologies.  Subscribe at

About Valerie Tarico

Seattle psychologist and writer. Author - Trusting Doubt; Deas and Other Imaginings.
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18 Responses to Can you Count on Social Security as Part of Your Retirement? Yes. Here’s Why.

  1. and the rich are still getting checks too. tho to be fair, just a ss check is not a living wage


  2. Paul Douglas says:

    Great article Valerie…. thanks for helping clear some things up for me.


  3. Dave Lynch says:

    Nicely done. The hysterics are usually promulgated by folks with something to sell!

    Liked by 1 person

  4. John Zelnicker says:

    I’m sorry to say, Valerie, that you are getting outside of your bailiwick once again. I commented one or two years ago on a post in which you included points about Federal government finances. Your response was that you didn’t have the time or interest in digging into what I was saying. Fair enough. I recommended that you simply stay away from the subject as your posts on women’s issues such as reproductive health and freedom (and religion) couldn’t be beat.

    Taking a quick look at your sources, I can see that you are trying to make the best of a narrative that has been created to deceive the public and make them think that we need to cut benefits or increase contributions in order to “save” Social Security at its present levels.

    This is false.

    The Federal Government has the unlimited ability to create all the dollars it needs for its spending without taxes or borrowing. Two former Chairmen of the Federal Reserve Board have said so publicly (Greenspan & Bernanke). This is something that is misunderstood or consciously distorted by mainstream economists and politicians.

    I don’t want to get into a long exposition of heterodox economics and Modern Monetary Theory (MMT), but MMT is an accurate description of how our monetary system works, regardless of what the CRFB, WSJ, or Kiplinger might believe.

    Trying to simplify; when the Federal government spends money to pay its contractors or its employees or Social Security beneficiaries, it sends instructions (not dollars) to a bank to increase the balance in the recipient’s checking account. At that point dollars are created for the use of the recipient. No taxes or borrowing are included in this process, only keystrokes. The only requirement is that the expenditure has been appropriated by Congress.

    And, that gets to the core point of the issue. Congress can appropriate the necessary funds to maintain Social Security any time it wants at any level it wants. Their refusal to do so is completely political, in order to keep the public worried and believing that the government can’t afford to give us what we need such as single-payer health care, free college education, and a more secure retirement.

    I’ll provide any additional info or answer any other questions you or any commenters might have.


    • Realist says:

      You just revolutionized not only the economy, but sports as well. Now you don’t need to actually knock the bowling pins down, you just place a 2 in front of that 89 and you win. Unless your opponent writes a larger number.

      We can apply this to all sports. Don’t waste energy playing them, just write bigger numbers. Winning come down to who lasts longer at writing numbers. Better yet, get computers to generate the numbers. Sports would more exciting than ever!


      • John Zelnicker says:

        Realist – You aren’t far off actually. How many points does the scorekeeper have available to award for goals or scores? Is there a limit at which he/she runs out of points and can no longer award the points earned by the team? No, there isn’t. In the same way, the government cannot run out of dollars.

        Dollars are created by the federal government and spent into the economy. You and I can’t create dollars. If the government didn’t create and spend dollars first, we wouldn’t have any with which to pay taxes. Where else would we get it?

        “The Chairman of the Federal Reserve Bank is telling us in
        plain English that they give out money (spend and lend) simply
        by changing numbers in bank accounts. There is no such thing
        as having to “get” taxes (or borrow) to make a spreadsheet
        entry that we call “government spending.” Computer data
        doesn’t come from anywhere. Everyone knows that!
        Where else do we see this happen? Your team kicks a field
        goal and on the scoreboard, the score changes from, say, 7
        points to 10 points. Does anyone wonder where the stadium
        got those three points? Of course not! Or you knock down 5
        pins at the bowling alley and your score goes from 10 to 15.
        Do you worry about where the bowling alley got those points?
        Do you think all bowling alleys and football stadiums should
        have a ‘reserve of points’ in a “lock box” to make sure you
        can get the points you have scored? Of course not! And if the
        bowling alley discovers you “foot faulted” and lowers your
        score back down by 5 points, does the bowling alley now have
        more score to give out? Of course not!
        We all know how data entry works, but somehow this has
        gotten turned upside down and backwards by our politicians,
        media, and, most all, the prominent mainstream economists.
        Just keep this in mind as a starting point: The federal
        government doesn’t ever “have” or “not have” any


        “Seven Deadly Innocent Frauds of Economic Policy”, pg. 13.

        I highly recommend this book for a basic understanding of the way our monetary system really works. It’s only about 70 pages and a very easy read.

        Warren Mosler, the author, is one of the creators of Modern Monetary Theory.


      • Realist says:

        Thanks. I think this is going to take up a lot of my time, but I’m kind of pedantic that way.
        Economics has always been an interest since reading Freakonomics. So, I’ll take a deeper look at the book you suggest. (I’m in the middle of 37 books.) I think it’s ironic how we both use scores in a game to prove the opposite thing. My point being that fabricating scores makes the game pointless, just as boundlessly printing more money makes the economy and work pointless, while Mr. Moser’s point was “see how easy it is to create points, we can do that with money.”

        The problem with his analogy is the relevant differences that he ignores (this seems to be a frequent fault with MMT). What are the relevant differences?

        Points in a game don’t come from a “lock box,” there isn’t a limited nor limitless supply of them, they are not subject to supply and demand. They are merely a tally based on events meeting certain conditions, i.e. a skeet ball going into certain holes resulting in various points, a football being kicked between the goal posts, the number of strokes to sink a golf ball, etc. (Note that Mr. Moser doesn’t use golf scores, the implication being that less is better. No one wants to think that way.) Scores are neither created nor destroyed, not in the physical sense. There is no such thing as “not enough points to go around” nor so many that points have no value. A score is simply a tally. The ability to tally something does not mean they are directly interchangeable. Even if a game were created to mimic the missing relevant conditions, at the end the only thing that will matter is who has the most.

        If I were to run Mr. Moser’s use of the analogy in the opposite direction, I can buy things with cash, therefore, I can buy things with points from a game. This assertion would be entirely false, not to mention a bad analogy.

        As we drift further from the analogy toward reality, points are generated, they are not created, there is no actual tangible product. Generating money involves the transfer of money between parties involved in the transaction. The money doesn’t pop into existence simply by writing it down. Banks tally money, generating it through credit.

        Unlike in football, that credit comes attached to debt. Debt is a very real thing because society is reciprocal. I work, I get paid. I buy something, I give them money. I get served, I leave a tip. I need more than I make, I borrow money. The more I borrow, the worse the debt. Where does this mysterious money come from? While it might “just appear” in my account as a larger number, like a score, it actually comes from future earnings. The management of this takes place, not with bags of coins or the passing of little green pieces of paper, but on a tally sheet that the bank keeps track of. Some of the money I make today goes toward the money I borrowed in the past.

        There is no such things as “score debt.” There are no Point Agencies scoring me based on all the games I play and all the points I will earn and my history of repaying points. No one will be coming after me to break my knee caps if I don’t repay the points they gave me. In the real world, the ability to wipe away debt is called bankruptcy, I’ll assume you know how that works, so I won’t rehash it here. In the real world, there is no score-ruptcy.

        If we generate wealth through the magic process of adding digits to bank accounts, there is actually no point in working. Which was the point of my analogy of points and money.

        For a good analogy of the fallacy of fixing fiscal matters with printing more money, read Douglas Adams ( Printing money dilutes its value. I know MMT followers minimize or outright dismiss the problem of inflation, but inflation is a very real thing. Look at it this way, if everything was made of gold, would gold have any value? No. One need only look at plastic and how we discard tons of it a year without a single thought.

        Another problem with the analogy is that the scorekeeper doesn’t have points available to award, even in games with a maximum number of points that can be earned (like snooker, where you can’t just create more points). Something runs out in the game, time (football), points (snooker), holes (golf). Games are a finite event, money management is for life.

        The final blunder Mr. Moser commits is mangling the analogy. To increase your score in a game, you have to meet certain conditions, but to increase your bottom line, you need only add more digits without meeting any condition, like borrowing or earning. At that point, economy becomes obsolete.



      • John Zelnicker says:

        Realist – You’ve made some interesting points, but it’s late for me, so I’ll provide a more complete response in the morning.


      • John Zelnicker says:

        I’m also a bit pedantic, if you didn’t notice, and I have been interested in Economics since I got my Econ. degree from Wharton 49 years ago.

        You spent a lot of time on taking apart the sports analogy and many of your points of distinction are quite right. It’s not a great analogy in all the different perspectives that can be applied to it. So, I’m not going to address any of your objections to the analogy, I’ll accept them.

        I would like to address some of the points you derive from your analysis of the analogy, specifically the issue of inflation and the depreciation of the value of the dollar.

        “Generating money involves the transfer of money between parties involved in the transaction. The money doesn’t pop into existence simply by writing it down. Banks tally money, generating it through credit.” Banks do indeed create money through credit, it’s the only way they can

        However, the federal government is unique in that it can create dollars without debt. The money created by the government does, in fact, simply appear by writing it down, i.e., keystrokes. There is no pot of money from which it comes. Taxes and borrowing are unnecessary for the government to issue dollars to pay for its purchases or pay employees. This happens when the Fed sends instructions (not dollars) to the bank to increase the balance in the recipients account; that’s when the dollars are actually created.

        “The more I borrow, the worse the debt. Where does this mysterious money come from? While it might “just appear” in my account as a larger number, like a score, it actually comes from future earnings.” No, it doesn’t, it comes from the bank. You are not a time traveler and you can’t bring anything from the future into the present.

        While you may need to consider potential future earnings to determine if you can afford to repay the loan (the bank certainly does), your payments on your debt are made out of current earnings as each payment comes due. You received debt money to increase your current consumption with the privilege and obligation to repay that money “in easy monthly installments”.

        “Printing money dilutes its value. I know MMT followers minimize or outright dismiss the problem of inflation, but inflation is a very real thing. Look at it this way, if everything was made of gold, would gold have any value? No. One need only look at plastic and how we discard tons of it a year without a single thought.”

        First, MMT emphatically does not minimize or or dismiss the problem of inflation. Inflation can be caused by any sector of the economy spending beyond the capacity of the economy to provide the real resources necessary. The key point is the availability of real resources, not the amount of money in the economy. When the economy is at full employment and full industrial capacity, any additional spending can push us into an inflationary episode. That’s one of the reasons for taxes. When there is too much potential spending, the government can use taxes to remove purchasing power from the economy and avoid inflation.

        Inflation is generally caused by shortages of goods, most often food and energy. Right now, inflation is being boosted by supply chain issues caused by COVID.

        Gold isn’t worth anything intrinsically, only the value given to it by those who own it. And, plastic, seriously? Do you honestly think plastic would be more valuable if there was only a little of it? That is truly a bad analogy.

        But the more important point is the unfortunate idea that more money in circulation makes it less valuable. This idea comes from the Quantity Theory of Money (QTM), which has long been shown to have no relation to reality. Basically, QTM says there are four variable that define economic activity and price levels. The problem is that the theory holds that two of the four variable never change, when, in fact they do change, constantly. All four of them change with any economic activity.

        At the end of your comment you misconstrue what Mosler is saying. He’s not saying that you don’t have to do anything to get your money (unless the government is giving out COVID stimulus checks), he’s saying that the federal government doesn’t have to do anything but enter numbers on a computer to send you your stimulus money.

        Finally, for the best place to learn about MMT I highly recommend Billy Blog:

        Bill MItchell is a professor in Australia and one of the original creators of MMT.

        I would really like to continue this discussion with you without taking up Valerie’s time and space. She has been very accommodating to let us go on like this. Please contact me at banjo23 [at] comcast [.] net.


    • Hi John – I did run this article past an academic economist before publishing.


      • John Zelnicker says:

        Mainstream academic economists have been getting this wrong ever since we went off the gold standard in 1971, and to some degree even before that.

        I know you are time-constrained, but I urge you to make time to read the short book I mentioned in my reply to Realist above. It can be downloaded for free at the link.

        You have shown in your writing that you don’t automatically accept the consensus on issues of religion, women’s rights, etc. The title of your magnum opus, Trusting Doubt, is what I’m trying to achieve here, first by getting you to doubt the mainstream economic consensus and then to look into the other (heterodox) side of the story. You’re very good at critical analysis and I’d like to see you apply that skill to economics, instead of simply accepting the mainstream view.


    • Hi John – I have done some reading on MMT since you first called attention to it, and the book you recommended is now in our house. As you said, I try not to accept things based on conventional wisdom. I also try to balance that against the recognition that expertise matters, and so I generally–though not always– defer to the preponderance of relevant experts. As far as I can tell, MMT is very contested, and not just by people who are intent on shrinking or undermining government. I, myself, find it believable that printing money can increase productivity when there is an available surplus of labor and other means of production, thus creating value that equals or exceeds the face value of the money printed. I find it less credible, given the fierce fights that go on about tax changes, that inflation can be managed in any nimble way by adjusting tax rates. So, my own jury is still out.

      Either way, if I want to argue that Social Security is solid, I think it is more likely credible to make that case within the assumptions of conventional and widely accepted economic theory, which in this case is a more rigorous standard. (I don’t know that I would persuade much of anyone if i said simply, “There’s no need to worry about Social Security because we can simply print as much money as we want.” )

      And thank you for your kind words.


      • John Zelnicker says:

        Good morning, Valerie.

        I really appreciate your taking the time to look into MMT.

        The first paragraph of your comment shows me that you grasp quite well the main points of MMT, and I have to agree with you that using taxes to manage inflation is far from nimble. That’s one part of MMT that gives me pause. Political time runs much slower than economic time.

        There is another part of MMT that many people ignore or misunderstand; the Job Guarantee. I’ll avoid a long dissertation, but briefly, it’s a scheme to provide employment to all who are willing and able to work and can’t find a job in the private sector and would be paid for by the federal government. Local governments and agencies would make the decisions on which jobs are needed in their area. It’s in some ways like the WPA. The wage paid would be set at a living wage adjusted for a location’s cost of living, and existing businesses would be forced to match that wage raising the income of millions of low-wage workers. There would be a brief rise in prices, but the additional spending power of the wage-earners would be far greater than the overall increase in prices, which will lead to greater production to meet the higher demand, benefitting employers as well as employees.

        There’s a lot more to the Job Guarantee proposal, but one of the effects is to serve as a price anchor that can provide the tools to address inflation quicker than Congress can with taxes.

        As to MMT being very contested, you are correct. It is being addressed more frequently now by mainstream economists even though they often demonstrate a total misunderstanding of MMT. My response is the misattributed quote supposedly from Gandhi: “first they ignore you, then they laugh at you, then they fight you, then you win”. Right now MMT is in the fighting stage.

        You did, as I said, make the best of the narrative about the problems of Social Security and I appreciate your point that using mainstream concepts and assumptions is a more credible way to approach the subject, at least for now. You have to meet people where they are.

        Fortunately, there are some folks in Congress who are beginning to understand MMT. The Chair of one of the budget committees is one. Bernie Sanders must also understand this as his chief economist when he chaired the Senate Budget Committee was Stephanie Kelton, a leading academic in MMT.

        I fervently hope that politicians and economists will come around to understanding how MMT shows the true economic power of the federal government to provide us with free health care, free college, and a struggle-free retirement. That would, of course, break a lot of rice bowls, so it’s going to be a long, hard slog to get MMT widely accepted. It will also recalibrate the balance of power between capital and labor which is far too heavily weighted toward capital.


    • I misspoke. The book that we have and that I have read part of is the one by Kelton, not the one you recommended.


      • John Zelnicker says:

        If it’s her new one “tthe Deficit Myth”, it’s excellent. She is one of the leading academics in MMT today.


  5. Sean says:

    SS is loaded with irony. It was brought in to essentially do away with poor houses. It was never meant to be people’s main retirement vehicle, it was also set up so that most people wouldn’t live long enough to collect or collect very little (irony #1). At that time, there was 19-20 workers per recipient, not it’s about 3-4. Due to the things you mentioned, but mainly (in my opinion) to longer lifespans.

    The money that’s not taxed is going mainly to the rich. Taxing that would have two effects, 1) more money in SS, and 2) higher payouts to larger contributors (irony #2). The caps actually keep payouts to the rich down. (I haven’t read all of the proposals for fixing it and maybe one of them is capping payouts to the wealthy while taxing them more.)

    Since the rich live longer than the poor, they will get more payout (irony #3). For a program that was supposed to help the poor, it wasn’t set up to help them that much. But survivor benefits did ensure that the family would get something, a colleague used his father’s SS to pay for his education, lifting him and his family out of poverty.

    I’m less bothered by single people not getting the benefits of married people. Two single, employed individuals have long received the benefit of being able to shield more money from taxes than married couples (married filing joint being less then double single); a disparity that was only fixed in recent years.

    Ultimately, SS does get money into the hands of the poor.

    Thanks, I enjoyed the article.


  6. Pingback: Prosperity and economic growth don’t require population growth – the opposite may be true with AI -

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