There's no doubt, Social Security has problems that urgently need to be resolved. If they aren't addressed in a meaningful way, and soon, those problems could turn catastrophic.
Changes could be coming as soon as January. The recently appointed Social Security Commissioner, Andrew Saul, wants to do two things in an attempt to make the SSA "better," according to MarketWatch:
1. Reopen field offices nationwide on Wednesday afternoons, restoring closings that were put in place in 2012.
2. Hire 1,100 new employees to provide service on the national 800 number and in its processing centers, where paperwork is handled.
These two actions have the potential to address a major problem revealed by the same article:
Repeated cuts to the agency's administrative budget over the past decade by Congress have forced the closing of field offices, staff cuts and long delays on Social Security's toll-free line — and an enormous backlog of people waiting for appeal hearings on disability insurance claims.
So the backlog of people waiting for disability hearings may finally get some help. But a big problem remains: namely, how to provide funding for this additional service.
This problem is compounded by cuts to "Social Security's budget [of] nearly 11% between 2010 and 2019, after adjusting for inflation." And there are more cuts on the way.
According to the Consortium for Citizens with Disabilities (CCD), the Administration plans to cut "over $83 billion from Social Security and SSI over 10 years, including at least $70 billion over 10 years proposed in cuts to the Social Security Administration's disability programs."
In light of these incredible budget constraints, one wonders where the money will come from to hire 1,100 employees. Nevertheless, additional staffing is necessary to fix the extremely long wait times and bad service.
Just How Bad Are the Wait Times?
According to an internal Social Security workload performance analysis (what they "do" with the budget), you can expect to get a busy signal 14% of the time when you call. It also takes an average of 506 days before you'll get a hearing (e.g. disability appeals).
And Kathleen Romig, senior policy analyst at the Center on Budget and Policy Priorities, suggests, "You should call early to make that appointment — perhaps two months in advance... If you are going to call the 800 number, you should block out an hour of time so that you can wait on hold." This "sluggishness" even seems to apply to critical services like Medicare.
As the SSA tries to staff up, reduce the backlog, and improve service, Romig warns:
If it's not done between the hours of nine and five, the Social Security Administration will be paying overtime, so that gets even more expensive.
Translation: The SSA needs additional funding not only for the new hires, but also for potential overtime pay, which may be necessary to eliminate the backlog of people who are waiting for help.
While we appreciate the Commissioner's good intentions, ultimately, the outlook for Social Security is still dire. From the SSA website, "Social Security is not sustainable over the long term at current benefit and tax rates."
You can see the official outlook and how it is projected to play out in this chart.
The Trustees estimate that the combined OASI and DI trust fund reserves will be depleted by 2035. At that point, payroll taxes and other income will flow into the fund but will be sufficient to pay only about 80% of program costs.
So unless the Social Security program gets real solutions to fix the funding gap, it seems like the SSA will keep spinning its wheels trying to get things done.
Don't Wait for Social Security to Solve Its Problems
One thing is certain: Social Security's future is uncertain. Even the proposed solutions by the Commissioner don't appear to address the underlying problems, and may make things worse.
But while the "experts" and politicians keep trying to figure things out, you don't have to wait. Take back control and prepare your nest egg for the worst.
Consider adding protection to your retirement through diversification into a variety of asset classes. Precious metals such as gold and silver can fit well in a comprehensive retirement plan.
Peter Reagan is a financial market strategist at Birch Gold Group. As the Precious Metal IRA Specialists, Birch Gold helps Americans protect their retirement savings with physical gold and silver. Discover more by clicking here now.
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