In today’s Marino on Money, Ross looks at the current state of Social Security. Last week, the 2009 Trustees Report was released, and the future of Social Security may have never looked worse. According to the report, the program faces massive deficits in just seven years. Here's how the current recession has changed the projections. Many older workers who have lost their jobs, and can't find another, have decided to file for benefits. Instead of continuing to work and pay taxes to Social Security, they retire, and start receiving the benefits they earned from Social Security. Other people are either unemployed, or earning less than they did, a couple of years ago. No income, means no Social Security taxes paid; less income, means less Social Security taxes paid. Expenses have gone up, and income has gone down. According to the 2009 Trustees Report, we would need to invest $7.7 trillion dollars today to pay future benefits. After reviewing this report, I'd say the future of Social Security looks like it will go from bad to worse. It is bad now because we know there will not be enough Social Security taxes to pay for the benefits starting in 2016. Then, in 2037, less than 20 years from now, it gets worse. That's when the trust funds are expected to run out of money. Then what? Maybe the Chinese will want to buy even more of our bonds. Or maybe not. What does all of this mean to us? Marino on Money looks at that tomorrow.
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