The Shocking Social Security Truth
As thousands of baby boomers enter retirement, many are questioning the future of Social Security benefits. More are retiring now than ever before, and that means the government is paying more than ever before.
But just how much more?
On Thursday, information released by the U.S. Treasury gave a shocking answer to this question.
It may not be a surprise that the government will pay more in Social Security this fiscal year than any year before, but the fact that it has already passed the record for payments – with another month to go – is something to raise concern.
This fiscal year ends September 30th, and by the end of August 2012, the federal government had paid $594.643 billion in Social Security benefits.
In all of the last fiscal year, the government only paid $591.492 billion. In comparison, this is low, but at the time it was a record high – up from $572.531 billion.
But now the government has already surpassed that record by a whopping $3.151 billion. And there's still a month left. You can guarantee it will be even higher.
Disability benefits were higher as well. The federal government paid $1.032 billion more in the first eleven months of this fiscal year than in all of last.
Payments were up from the 2011 level of $128.094 to $129.126. The number will likely be higher by the end of September.
And it's because more people than ever are claiming these benefits. Take a look at the chart, showing how much these numbers have risen since just 2000:
In August 2012, 8,767,941 workers and 2,018,569 family members of disabled workers were collecting disability. A total of 45,505,287 retirees and their families were collecting Social Security.
And this will only continue to rise. Plenty of baby boomers will be entering retirement within the next decade. We can expect to see this 45 million become modest in comparison.
Since the 1960s, the number of dollars in benefits, both for disability and Social Security, has risen more than 700 percent:
It's a growing problem, and the government knows it. As the government works to lower the national deficit, with these programs' growth standing glaringly apparent, it isn't yet evident what will become of them. But those who are even further from retirement might want to think about building up their own nest egg in case the growth finds its peak.
*Charts courtesy of Global Economic Trend Analysis+8
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