Insights Blog

Never ever ever will Social Security be eliminated

December 18, 2023

"Never ever ever will Social Security be eliminated", SCEPA Director Teresa Ghilarducci told Yahoo Finance recently, "the political and economic case for the program have never been stronger".

Surya Kolluri, the head of the TIAA Institute, underscored that point by noting the many risks the program insures against, including the risks posed by volatile markets, inflation, cognitive decline, and outliving your savings.

More than 60 percent of adults 65 and older receive most of their income from Social Security and the poorest one-fifth of elders receive 85 percent of their income from the program. Nevertheless, as retirement expert Robert Powell notes in the conversation with Yahoo Finance, without action from Congress to close the program's current financing gap, the Social Security fund is set to run out by 2033. At that point, beneficiaries may face a cut in benefits. There is also a threat from certain members of Congress who seek to privatize the program, gut it, or get rid of it entirely.

That outcome would have catastrophic consequences for the nearly 22 million people — elders, but also children — who depend on the program to keep them out of poverty. The program needs to be bolstered, not cut. At the same time, it is important to remember, notes Kolluri, that Social Security is insurance. Retirement accounts, as private wealth, can and should be a part of our retirement system. We need both, not one or the other. In addition to shoring up Social Security, we must make efficient and fair savings vehicles accessible to all workers, not just those who are lucky enough to work at jobs offering retirement benefits. Plans like the Retirement Savings for Americans Act, which aims to make pensions broadly available to all workers, would help fill this need.