By John Zeltmann

With concern about the Social Security trust fund's solvency and speculation rampant that the system is bankrupt (which it actually isn't), many people wonder whether potential future changes will be directed at their retirement benefits.

My short answer is generally, "Yes, if you're under 50."  I acknowledge that 50 is an arbitrary age, only used to make the point that I strongly believe that people nearing retirement don't have much to worry about when it comes to their benefits being materially altered by potential legislative changes made to save the Social Security system.

Why am I so confident?  Anecdotally, I don't believe that folks in Washington will aim to make a change targeting the folks on Main Street who have paid into the system for so long and feel fully entitled (arguably so) to the benefit they've earned over the years. 

Not into conclusions driven by my anecdotes?  Then I'll use history.  One of the more recent major overhauls of the Social Security system came in 1983, when the Federal government was faced with similar trust fund insolvency issues.  Among several other resolutions passed in the bill, one of the major revisions included was a gradual increase in the age of eligibility for full retirement benefits from age 65 to age 66 in 2009 and age 67 in 2027.  Simply put, they effectively changed the Full Retirement Age from 65 to 67 and did so over a transition period of 44 years!

But what about the recent legislative changes made in late 2015, eliminating the popular File & Suspend strategy as well as the Claim-Now, Claim-More-Later strategy (via the restricted application)?  Those changes impacted people who were at or near collecting, right?  Indeed they did.  However, the number of people impacted was marginal - as we've written in other blog posts, approximately 90% of folks claim at or before Full Retirement Age¹ (and the majority of those folks are claiming at age 62), so while the changes in 2015 made for good headlines, it impacted the small number of claimants who are actually taking advantage of the open loopholes.  In fact, it did little to extend the currently projected trust fund extinction date of 2034².

I suspect a far-reaching, more impactful change to the Social Security system is much more likely to be grandfathered in over time, similar to how the legislation in 1983 was introduced.

¹ Munnell, Alicia H., and Angi Chen. “Trends in Social Security Claiming.” Center for Retirement Research at Boston College, 31 May 2015.

² Lew, Jacob J., et al. “The 2016 Annual Report of the Board of Trustees of the Federal OASI and DI Trust Funds.” U.S. Government Publishing Office, 22 June 2016.

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