LOUISVILLE, KY (WAVE) – Social Security is set to run out by 2037 - that's the latest from the nonpartisan Congressional Budget Office. This year alone it's on track to collect $45 billion less in payroll taxes than it will in turn pay out.
It's a scary thing to hear that the Social Security fund is on track to run out of money, but one expert we talked to says not so fast. He says if certain measures are taken then the funds will be there for decades to come.
"Every day you hear something about Social Security," said Darrell Jacobs, the owner of D&D Barber Shop in downtown New Albany.
Jacobs says for the last 56 years, retirement talks have filled his shop.
"I don't think that Social Security will run out," Jacobs said. "Fifty years ago they said the same thing."
He's not the only one that feels this way. Russ Ray, a Professor of Finance at the University of Louisville, agrees with Jacobs.
"I can guarantee you with 100 percent certainty that Social Security will be solvent at least another 100 years," said Ray.
New congressional outlooks show Social Security trust funds running lower and lower each year.
"The funds will be depleted in 2037 if nothing is done, but Congress will do something," said Ray.
Ray says it would just take little tweaks to keep it going.
"Raise the tax maybe a tenth of a percent, push the retirement age back maybe one or two months, raise the income that's taxed maybe $500," said Ray.
He says retirement savings should start immediately.
"As soon as you graduate from college you should think retirement and the golden rule is to save 10% of your gross income every year for retirement," said Ray.
That's why it's so important to teach savings at a young age, which Junior Achievement does through their school programs. "We stress how important it is to make sure that you save money, so you will have money available if something goes wrong in life and we all know that things go wrong and also ultimately for retirement," said Debra Hoffer, President of Junior Achievement.
"Social Security is a good thing, I hope it never goes out, but I don't think it will, because a lot of people depend on it," said Jacobs.
Ray says the ideal situation is to look at Social Security as an additional income to take trips and have fun in your retirement, and that's why starting to save early is so crucial.
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