Will Social Security run out of money and will I lose my retirement benefit? This is a question we get frequently. It stems from the fact that the Social Security Trust Fund is scheduled to run out of funds in the year 2033. This was highlighted in the Social Security Board of Trustees’ annual report released last week. Up until 2009, the funds received into Social Security from current workers ceased to cover the benefits paid out to retirees. Since then, the previously accumulated trust fund surplus has covered the shortfall but that is projected to run out in 2033. At that time, incoming Social Security taxes will only be able to provide for 76% of benefits. SSA Yahoo Finance
Will those who receive Social Security wake up in a dozen years to find they lost 24% of their benefit overnight? Our view is that scenario is doubtful and there is some precedent. The Social Security Disability Insurance program’s trust fund ran out in 2016 and Congress shifted funds to cover the shortfall. And this past year, Congress passed an $80B bailout of underfunded multiemployer pension plans run by labor unions and employers from multiple industries. One could argue that the pensions were replenished due to the political sway of the groups. But Social Security involves practically the whole country. It is hard to imagine that Congress would allow an abrupt and severe cut in benefits to so many Americans. Congress does have options to cover any shortfall such as shifting other funds to the trust, raising taxes, or even borrowing more and increasing debt. Congress has a history of resolving crises but not averting them. So, they will probably kick the can down the road for a little longer, until they can’t. And at that time changes will be put in place to “save” the popular Social Security program. American Enterprise Institute
Still, we can’t rule out a reduction in benefit. It is possible that to fix the Social Security inflow-outflow imbalance Congress reduces retirement payouts. When advisors at RSWA run retirement projections for clients, we can run scenarios reducing the Social Security benefit by 5%, 10% or even more. Being able to run a scenario reducing the benefit can provide clients an idea of how their retirement situation is affected if changes in Social Security occur. If you would like to discuss your Social Security benefit in more detail, please reach out to RSWA or your advisor team.
August Job Growth Misses Big: Last Friday, the August jobs report was released and it was shockingly low. Expectations were for an increase of 720,000 jobs and it came in at a much lower 235,000. The spreading Delta variant is the suspected cause as the leisure and hospitality sector showed no gains in the month after leading job growth much of the year. We have to keep in mind that the report is just for one month. A silver lining in the report was that July and June job growth numbers were revised higher. The same can happen to the August numbers but more than likely economic growth stumbled some last month and investors will be watching to see if job growth regains its footing in September. Zions Bank CNBC
What’s the Chance Vaccinated People Catch the Virus? “Breakthrough” cases are ones in which a vaccinated person contracts the virus. This summer’s headlines showed cases started to emerge. But detailed data is coming out that suggests your chance of contracting the virus if vaccinated is about one in 5,000 per day. And if you live in a highly vaccinated area it could be one in 10,000 per day, which to put it into perspective means it would take more than three months for the combined risk to reach 1%. If the data continues to support this it certainly doesn’t mean vaccinated folks can be careless - new variants can emerge and asymptomatic individuals can infect the unvaccinated, such as children. The research may indicate that with a highly vaccinated population, the virus becomes a manageable risk. One last note, research following over 6 million vaccinated individuals revealed there were no serious health side-effects linked to the mRNA vaccines. All around good news for vaccines! NYT Sci Tech Daily
Quick Hits for the Week:
- Cocoa may increase exercise performance and lead you to want to exercise more! Very Well
- S. manufacturers aren’t the only ones having a hard time hiring workers – so are Chinese firms: WSJ
- Inflation is showing up all over the world – it may be a good sign that it won't’ stick around: NYT
- Learning Chess is a great way to keep the brain active and this free online site is one of the best – the problem is I keep losing to my teenage son! LiChess.org
- 95% of Americans don’t get enough fiber – here are ways to work more into your diet: CNBC
Metabolism May NOT Slow as We Age: Recent research indicates that metabolism does not slow between the ages of 20 to 60. So, middle-aged folks are packing on a few pounds not because of a slowing metabolism, as is commonly thought. Other factors such as diet, activity levels, or sleep could be factors contributing to weight gain for that age group. The study indicated babies under one have metabolism in hyper-drive which declines three percent a year after age one up until age twenty. There it plateaus for four decades. After age 60, the research indicates metabolism slows about 1% per year. The experts state the key to a healthy weight is a nutritious and filling whole foods diet. NBC News
Sweating is a Human Superpower: It’s common knowledge that sweating helps cool the body, but many may be surprised to find out profusely sweating releases a “happy hormone,” just like a runner’s high. I learned this and many other interesting facts such as if you analyze the sweat from someone, even from a fingerprint, you can detect if they have had caffeine, alcohol, other drugs, or even stress hormones. Shortly, wearable strips may even give us instant feedback on if we have had too much to drink to drive or alerting a coach that a player on the field is fatigued and needs replacing. One thing sweat doesn’t do that surprised me is that it does not detox the body – it is a myth that a good sweat is a good detox strategy. Listen to the podcast or read the transcript for more surprising info about the superpower of sweating. Science Friday
Fantastic Fungi: All the wonder that is mushrooms is highlighted in the beautifully filmed documentary, Fantastic Fungi. Not quite plant, not quite animal, mushrooms and fungi are unique beings that not only do remarkable things, but our world could probably not survive without. They break down waste and provide nutrients and food. Underneath the soil, fungi create communication networks allowing trees to communicate and share nutrients and water, in what some call the “Wood Wide Web.” Fungi can be used in medicines, the most common being aspirin, but many others are probably waiting to be discovered. Companies are starting to create packaging out of compostable fungi, and the list goes on about these amazing organisms. It’s worth the time to view and learn about fungi, and realize there is still much more to learn. NetFlix Wash Post Review
Enjoy the weekend and thank you for reading The Friday Buzz! Feedback is welcomed and please forward this to a friend! Be well, take care, and stay safe!
