Before you succumb to the doomsayers, read the recently released Social Security Board of Trustees' 2011 annual report on the financial health of the program.
If it doesn't put you to sleep first, this bipartisan report should calm some of your retirement planning fears about this source of income going away.
The report didn't point out much that was new. Instead, it reiterated that Social Security is a pay-as-you-go system. Today's workers pay for current retirees. The baby boomer bubble has been paying into this system for nearly 50 years. They've built up a sizable trust fund that will keep the system solvent until 2036, when the earliest baby boomers who turned 65 this year will be 90 years old -- or dead. At that point, there still will be sufficient payroll taxes coming in to pay about 77 percent of benefits at the levels that are promised today, even though by current projections there will be fewer workers.
The deficit over the next 75 years, as calculated by Social Security's actuaries, is 2.22 percent of taxable payroll. Based on a salary of $50,000 per year, that means that if workers and employers paid another 1.11 percent of tax on payroll -- an additional $550 each annually -- the retirement shortfall would disappear. But paying more isn't the only solution -- and maybe it's not the best. The least painful for most people might be applying Social Security taxes to incomes that rise above about $107,000 -- without increasing the amount these high earners can get from the program. That is a solution President Barack Obama has endorsed.
You can argue that this isn't fair, but as my mother used to say, life isn't fair.
And you can put the fear out of your head that Social Security is "bankrupt" or "going broke," as some people with an ax to grind keep saying -- over and over -- because it's just not true.