Social Security and Medicare ‘go-broke’ dates moved up, but Lincoln expert says not to worry

LINCOLN, Neb. (KLKN) — Medicare and Social Security’s board of trustees announced new “go-broke” dates Wednesday.

These are predicted dates when the programs can no longer pay benefits at 100%.

For Medicare, that’s been pushed up from 2036 to 2033. And for Social Security, it’s moved from 2035 to 2034.

“Social Security isn’t really going broke,” Eli Mardock said of the easily misinterpreted catchphrase.

Mardock, a financial adviser at Stonebridge Wealth Systems in Lincoln, explained that those dates apply to the trust funds — not the money that’s still coming in.

“I think a lot of people don’t really understand that 81% of it is funded by payroll tax,” he said.

Mardock said while the trust funds may run out of money, “that’s really just that extra bit,” referring to the 19% not covered by payroll taxes.

SEE ALSO: As retirement age goes up, Lincoln financial expert says you can’t count on Social Security

He said “there is nothing to be concerned about” if you have clarity and a plan and advised everyone to speak with a wealth management advisor.

“Sometimes we’ll factor into a plan, ‘Well, what if Social Security is reduced by 20% or 30%?'” he said. “So we can look at these different hypotheticals and how they would change your plan. It’s fairly easy to rerun the math on that, so I’d really encourage anyone who is approaching retirement or in retirement to look at their income sources, where that’s coming from, and run a stress test on it.”

He recommends putting your retirement savings a Roth IRA account, which taxes your funds now instead of later, when the rate could change significantly.

“Because at the end of the day, it’s not just about what you make, it’s about what you get to keep of it” Mardock said. “So by changing your income sources, you may get to keep more income by having less of it taxed.”