OMG! Social Security is going bankrupt!!

That's how people are reacting after a new report from the government that says the Social Security trust fund will be exhausted in 2035, earlier than expected.

This news jibes with what a lot of people (especially young people) think: That we're running out of Social Security money, and that it won't be around when they retire.

As long ago as 1994, polls showed that only 9 percent of young people thought they'd ever see a dime of Social Security money when they retired.

It's probably worse than that today.

In an anecdotal poll of the Business Insider office (which is fairly young), nobody seems to think that they'll be getting full benefits when they retire.

The good news is: They're all wrong!

Social Security isn't going anywhere!

Here's the critical misconception that people have: They think of Social Security as a fund that will one day "run out," at which point the payments will cease. This is wrong. Social Security is a government insurance program that for accounting purposes pretends to operate as a fund.

But that fund is an accounting trick, and the amount of money that exists in the fund is irrelevant to whether it will keep getting paid out.

If the "fund" goes bankrupt in 2035 or whenever, then your Social Security check will just come out of general revenue/expenditures. No big deal. Nothing changes.

Okay, you say, but isn't there a good chance that Congress will change Social Security before then? It's possible that there will be a few tweaks here and there, but the politics aren't getting any easier. If Social Security tweaks haven't been possible now, where will the political will come to change things? Remember, if there's one thing that even conservatives can't stomach, it's real changes to benefits for the elderly.

So we're all good. The fund doesn't matter, and Congress won't have any political will to change the program.

Carry on!

As for more about the program running out, see here >