Social Security is not the house of cards everyone thinks it is. It is true that its trust funds could be exhausted before the end of the decade, and that is a serious problem to be solved. But even if that happens, Social Security is not going to go away. Here are three reasons why.

1. Social security contributions pay to cover most program expenses

Social security trust funds are one source of funding for the program, but they are not the most important. This honor belongs to the social security taxes that every worker pays. You pay 6.2% of your salary up to the annual maximum ($ 142,800 in 2021) and your employer contributes, for a total of 12.4% of your income donated to the Social Security Administration. Self-employed people have to pay all 12.4% themselves.

In 2019, those payroll taxes stood at $ 944.5 billion, enough to cover 89% of all Social Security benefits paid that year. The government will continue to collect these taxes even after the trust funds are depleted, so the program’s largest source of revenue will remain intact.

However, payroll taxes may not go as far in the future due to an increasing number of beneficiaries and fewer workers contributing to the program. In 1940, there were 159.4 covered workers paying Social Security taxes for every retiree claiming benefits. Nowadays, there are only 2.8 workers per beneficiary.

This ratio is expected to decline over time as baby boomers now enter retirement and advances in medical care are helping people live – and qualify for Social Security – longer than ever before. This will cause Social Security to increase spending faster than its income, although even then payroll taxes will still account for the majority of program funding.

2. Some social security beneficiaries also pay taxes

The third source of social security funding comes from the taxes that retirees above a certain income pay on their benefits. In 2019, that gave the program an additional $ 36.5 billion, enough to cover 3.4% of its expenses.

Only seniors with interim incomes – Adjusted Gross Income (AGI) plus non-taxable interest and half of their Social Security benefits – greater than $ 25,000 for single adults or $ 32,000 for couples will owe federal taxes on their services. Here’s an introduction if you want to know how the government taxes Social Security recipients.

However, it is possible that these taxes will generate more income for Social Security over time, as more and more older people begin to apply for them. We cannot predict how much income this would generate, as the taxes owed depend on the provisional income of each retiree, rather than being a fixed percentage of income, like what workers pay. Nonetheless, it’s another Social Security revenue stream that’s not going anywhere anytime soon.

3. The government can change how social security works

The current social security system has problems, but it can change over time. The government has yet to agree on a plan to ensure its longevity, but several members of Congress have come up with ideas over the years. They include:

• Increase or remove the salary cap subject to Social Security
• Raising the full retirement age (currently between 66 and 67, depending on the year of birth)
• Social Security tax rate increase

If changing the program seems like a radical idea, know that it has already been done. When Social Security was first established in 1935, the full retirement age (FRA) was 65. But in 1983, the government decided to gradually raise the FRA to extend the duration of the program. Another change is therefore not without precedent.

Even if the government does nothing and Social Security trust funds run out, it would still be able to pay around 76% of planned benefits until 2090, according to the 2020 Social Security Administrators report. This was written before the pandemic, so that statistic has probably changed somewhat. But the point is that Social Security will still have a fair amount of money to pay beneficiaries for decades to come.

If you’re worried that your benefits, along with your personal savings, aren’t enough to cover your retirement expenses, there are things you can do to increase your checks. You can start some of these strategies now, even if you are too young to register for benefits. These tips will always be effective no matter what the government does to the program, so try as many as possible. When you’re ready to start claiming Social Security, you’ll be glad you did.