Bring it to Barb


Dear Barb,

I am a baby boomer and I will be retiring from my career and collecting social security in a year. What does the federal debt and social security have to do with each other? Can the federal debt impact my future social security that I need to help me enjoy my retirement? 


Bummed Out Baby Boomer

Dear Bummed Out Baby Boomer, 

Beginning in 2018 until approximately 2034, social security will be paying out more benefits than it generates in revenue. 

Assuming lawmakers do nothing and allow the program to run its course, social security’s current $2.9 trillion dollars are expected to run out completely by 2034. Should this happen, the report forecasts the need for “across-the-board” cuts in benefits by up to 21 percent in order to sustain payouts through 2092. 

What do federal debt and social security have in common, you ask? Well, simplifying it as much as possible, the Social Security’s asset reserves of $2.9 trillion aren’t just sitting in a vault collecting spiders and dust! That would be poor money management by the federal government. This excess cash would lose purchasing power over time due to inflation. 

So, the Social Security buys bonds with its excess cash and Social Security receives interest payments from the federal government until the bonds mature. The federal government then uses this cash to fund items as needed. 

The concern is that at some point the federal government may not be able to make the full interest payment to Social Security, or fully redeem a bond if interest payments are too burdensome.

Each month, more than 62 million people receive a benefit check. Nearly 45 million are 65 years old or older, and 60 percent rely on Social Security for half of their monthly income. 

Relax. This debt concern is very real but there are two reasons why it shouldn’t impact beneficiaries at the point we are now, for many decades. The first reason is that the interest income Social Security generates accounts for only 8.5 percent of all the revenue the government collects. Second, the payroll tax on earned income from your check, as well as the taxation of benefits, is an additional 12.4 percent. These two sources ensure that money will continue to flow into the program to the Social Security Administration and make the payments to eligible recipients regardless of whether debt levels continue to climb. 

The biggest consideration, however, is that Social Security’s $2.9 trillion in asset reserves are expected to be completely exhausted in 14 years. It’s simple: Without any excess cash and no special-issue bonds purchased, there are no interest payments being made back into Social Security. 

Should congress pass a sweeping overhaul to the program between now and 2034 and use asset reserves, investing into special-issue bonds for another 50 to 75 more years, then the growing national debt could present a genuine concern. 

Congress tends to kick the can down the road, and we really don’t know what the future decisions will be or how they will affect the baby boomers and newly retired workers.

Continue to pay attention to all the information available and eagerly research any Social Security changes. You want to protect your money that you paid into what was required to be deducted out of your wages every hour. You worked, after all. It is YOUR money! 

Barb Rock is a mental health counselor and the published author of “Run Your Own Race: Happiness after 50.” Send any questions related to mental health, relationships or life issues to her at

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