Each year Social Security’s Board of Trustees Issues an Annual Report on the status of the social security programs.

There are technically two social security trust funds; namely, the Old Age and Survivor’s (OAS) Trust Fund, and the Disability Insurance (DI) Trust Fund. However, these two are often lumped together and referred to as the OASDI Trust Fund.

This year’s Trustee Report says that the combined trust fund reserves are growing and will continue to do so through 2019. Beginning in 2020 the trust fund reserves will begin to decrease, meaning the cost of the program will exceed its income. This is projected to continue until the trust fund is depleted in 2014. At that point it is projected that there will be sufficient income to pay out only 79% of scheduled benefits.

The projected actuarial deficit over the long-haul 75 -year period is projected to be 2.66% of taxable payroll, which is .02 percentage points less than in the 2015 report.

So, Social Security will be there in 20 years; however, benefits may be reduced by 21%, meaning that if your scheduled benefits are $1,000 per month, you may end up seeing only $790 per month.

It would seem prudential, then, to save for your own retirement as much as possible.

Of course, there are certain policy options lawmakers can consider to strengthen the financial basis of the programs, including raising the payroll tax or raising the cap on payroll taxes (for 2016, the maximum amount of taxable earnings for payroll purposes is $118,500 – see https://www.google.com/#q=cap+on+payroll+taxes+social+security(visited August 10, 2016)).

Some things to remember about the Social Security retirement program are as follows:

• The earliest age for taking early retirement is 62.
• Postponing receipt of your social security retirement benefits past your full retirement age (FRA) will allow your monthly benefit to grow by 8% per annum until age 70. For example, if your benefits at FRA at age 67 are scheduled to be $1,000 per month, if you wait to begin receiving your benefits until age 70, the monthly benefit will have grown to $1,240 per month.
• You FRA depends on your age. For those born in 1937 or earlier, the FRA is age 65. For those born between 1938 and 1959 the FRA is between 65 and two months to 66 and 20 months. For those born after 1960 the FRA is 67.

Of course, the decision of when to begin claiming social security benefits is a complex one, depending on a number of factors, including other sources of income, your health, and you and your spouse’s life expectancy. The decision is best done in consultation with your financial advisor.

This material should not be construed as legal advice for any particular fact situation, but is intended for general informational purposes only. For advice specific to any individual situation, an experienced attorney should be contacted.