Unknown Speaker 0:00 Do you need to be worried about Social Security in 2025 separating fact from feeling on this show with a med tech wealth advisor. Unknown Speaker 0:16 Hey, welcome back to the show, everybody. We're gonna talk about a topic that's kind of a hot button right now. As we record this in the spring of 2025 we've been getting a lot of questions from clients about their Social Security. We're seeing it all over the internet. And we just wanted to address some of the reality of what's happening over frankly, the the fear that's being put out there. Unknown Speaker 0:41 My partner, Matt Finley joined me. Is joining me again today. He wrote an excellent article on this. We've got posted on the blog. I think it lays out how to how to think about this in a more, you know, balanced manner. Because the reality is, we work with a lot of retired clients, and this is a decent portion of their of their retirement income. So, you know, they're rightly so have some fear about if, if it's going to be affected or go away, but we just want to talk about some of the reality with it. So hey, thanks for coming back on the show again today, Matt and joining your joining us and giving us your thoughts. Absolutely thanks for having me on. Why don't we just jump right in and you know what's basically, what's going on with Social Security right now that is causing some of these, these questions, yeah, so we're getting down to the, you know, deadline, or the the crux of Social Security being underfunded, the Government Accountability Office and other folks who do the projections and math on this are looking at 2032 being the year that Social Security runs out of proper funding and Medicaid and Medicare around 2036 Unknown Speaker 1:55 Now what that means is not that you lose benefit, but if Nothing is done to shore up the program. Right now, the projections are that you would receive 79% Unknown Speaker 2:06 of your current benefit, or in 2020 in 2032, is benefit. So not ideal, not not ideal. I mean, that sounds, you know, it sounds dire that it seems like we've had a lot of you know, in my 25 years doing this, there's been several times when there's been scares about Social Security that I can remember. Unknown Speaker 2:27 It seems like that date just keeps getting moved out further and further. Always feels like I kick the can down the road, type of scenario. But you know, what do you think? I mean, can we fix this? Yeah, I think the solutions are actually not too difficult. What it comes down to is people in Washington wanting to actually fix it, and we know that it's a political time bomb for whoever is left holding that bag. That's why it's been my theory that it'll come down to the end, whoever is in office at the time, we'll have to fix it, and it might be, you know, political suicide, if you will, for that party or that President. But we can't wait that long. The earlier we try to correct it, the easier the correction is. It's just a minor adjustment versus a massive one down the road. Unknown Speaker 3:18 Some some quick items that you know would help adjusting benefits for future recipients, not those on benefits. So let's say our generation maybe reducing the pace of growth, whether it's the cost of living increase they give every year, dropping that down a little bit, or just a lower Unknown Speaker 3:40 benefit payout to start with, that would have a big Unknown Speaker 3:45 adjustment to the program, increasing the age of retirement. So right now, it's 62 to 70. Is the window that you can begin your Social Security payments. Maybe they move that to 65 to 73 to match the RMD data, RMD numbers that are out there. Boy, that'd be a lot easier to remember, wouldn't it? It'd be way easier to remember. Obviously, Social Security would start three years later. So that kind of is kicking the can down the road, but it allows the money in the trust to grow a little bit more more before the benefits taken out, Unknown Speaker 4:21 the other ones would be raising your payroll tax. Currently, you know, we pay 5.3% Unknown Speaker 4:27 as an employee, and you and the employer pays 5.3% on their side for Social Security, maybe that goes up to 5.6% Unknown Speaker 4:36 on each side. Same thing for the Medicare solution, that one is point 9% of your payroll. And actually, that one's pretty easy to fix. Just a minor adjustment would fix the Medicare so that one, I think, will be solved very easily. And then, of course, the third one, or the fourth component of all this, is getting in and either modernizing the payment system, trying to eliminate. Unknown Speaker 5:00 As much of the fraud and waste that we know is in the system, Unknown Speaker 5:04 government accountability, Office has given out numbers recently on how much waste and frauds out there we know annually. Medicaid, as an example, is about 100 250 billion in fraud that gets investigated and prosecuted. So if we can clean some of that up, obviously that would help as well. But I think the actual answer is all of them combined would be the best way to shore it up. Yes, yeah, it is. It's, it's just a matter of political will, as you mentioned. Unknown Speaker 5:34 Man, you know, just not to restate everything you said, but you know, any one of those would fix he raised the payroll tax enough that takes care of everything, even if you leave all the payroll. You know, I'm sorry, the the fraud and the waste in it is a lot more palatable to just have incremental adjustments on each and then, you know, frankly, from a political standpoint, it doesn't, Unknown Speaker 5:56 it doesn't crater your career if, like you, you get behind a vote for one item, and your constituents don't want that. So I that does feel like it's the right move, that we'll get a little bit of all of it. Maybe some of you, maybe you can speak to some of this, that what has created, some of this fear is, is, as a lot of the shall we say, that the comments from our colorful administration right now, and you know, it does seem a little smoke and mirrors sometimes as as if the intent is to create a a lot of bluster, a lot of a lot of news, a lot of noise, that doesn't always happen, and then we go a different direction. So just kind of Unknown Speaker 6:35 kind of speak to that, what's really, what's really Trump coming out and saying that is scaring everybody so much? Yeah, I don't actually think it's what he's saying as much as what is being potentially passed as the continuing resolution or funding bill in Congress. And of course, he has some input into that. To be very clear, both parties and President Trump have stated numerous times that they will not Unknown Speaker 7:05 change any benefits for any individual. Unknown Speaker 7:09 So that I just want to put that out there be very clear. No party is saying that, and the President isn't saying that. Where the fear is coming from is because the president mandated in or his request, I should say, not necessarily a mandate in the funding bill is to cut money from literally every division of the federal government to reduce our national debt. That includes the body that governs Social Security and Medicare. And that's an $800 million cut he's asking for Unknown Speaker 7:40 that is not meant to be a cut in a client's or a person's benefit. It's meant to be administratively in fraud. That's what it's the directive is for. But of course, that's not what the opposing party or the media or whoever's creating fear out there will ever tell because they're trying to drive a wedge Unknown Speaker 8:00 in it, and by no means am I defending what the President has said or what Republicans are doing in Congress or proposing, but understand that it they're very, very clear that they will not cut benefits. Can they go back on their word? Of course, will they? I don't think so. Right? I think that's a great a great point is that Unknown Speaker 8:21 doesn't matter who's in power. Doesn't matter the issue. Unknown Speaker 8:25 Each side is going to pick what is, the most fearful, the most, Unknown Speaker 8:30 you know, outrageous, if you will, to sort of drive that wedge. So I think as we're talking to clients, we're just often, you know, we're hearing, we're hearing some crazy stuff sometimes on the internet, from clients, you know, and I can't even go into all of the items I hear now, at any time that I hear something that's that just seems so far to one side or the other. Frankly, it's easier to just just discount that. That's why we have the checks and balances in the government. It you can hear, you can hear about all of the crazy scenarios, but we have some checks and balances in the government, and it's just tends to moderate at the end answer and always remember that a president, any president, cannot Change your Social Security. Unknown Speaker 9:21 It can't come by executive order can't come by some written note, Congress has to approve and pass it. That's the beauty of our democracy, right? Yes, that's that's excellent. So let's just kind of wrap this up. What's really the what's really the key takeaway, we want to have people understand calm down, relax. Your Social Security isn't going away, likely not even going to be cut now or in the future. There's plenty of mechanisms that Congress and presidents can do to solve it, and it will be solved at the end of the day. Unknown Speaker 10:00 You're not going to lose your social security, because the facts are, if Social Security was reduced or removed, we created an even bigger problem for the federal government to have to come in and fix. Yeah, I think that's just not logical. It's not going to happen. Agree? Yeah, I think that's a great way to look at it, and frankly, that's why we do our financial planning, Unknown Speaker 10:20 to to, you know, just take, take into account changes that could come. We can certainly model the catastrophic items of Social Security going away, if you want to see that. But we just don't think it's, you know, reality, Unknown Speaker 10:36 however, that's what planning is for. So we can, we can, if we need to look at your situation to kind of take the the fear level down, concern level down, Unknown Speaker 10:47 let's do that. But then let's also just have a reality check about what's what's more probabilistic. Unknown Speaker 10:54 That's great. Thanks for Thanks for kind of coming on the show and educating our you know, our listeners, our clients. I mean me as well. I'm always learning from you as you dig deep some into some of this policy. Unknown Speaker 11:07 So that's all the time we have for today. If you want to learn more about this, you can, you can check the comments below, and we'll link to the article that Matt wrote. Look for other other items that we'll do to educate the community and until next time, remember financial freedom takes more than money. So find your purpose and make a plan to live your life well. Take care of each other out there you. Transcribed by https://otter.ai