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We have an Important Announcement!

RPC CPAs + Consultants, LLP will no longer be accepting online credit card payments after March 15, 2019.  Please call our Albuquerque office at 505-883-2727 or your local office and they will process your payment for you.

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RPC CPAs + Consultants, LLP (RPC) has merged with the nationally recognized accounting firm of Carr, Riggs & Ingram, LLC (CRI) and our offices will now operate under the name of Carr, Riggs & Ingram.  

We will continue our tradition of community support and delivering quality audit, accounting, tax, and consulting services - now with enhanced service capabilities available from a regional firm that is one of the Top 20 firms in the U.S. For more informaiton regarding CRI's 50+ office locations, more than 1,800 professionals, or industry and service specializations, visit our new firm's website at www.CRIcpa.com

Blog

Jan 10, 2014

What Happens When Social Security Funds Run Out?

Our Social Security system not only provides retirement benefits, but also provides disability and survivor benefits to covered workers and their families. The Social Security system receives funding from numerous sources, including the Social Security payroll tax (FICA) on wages, self-employment tax on the income of self-employed individuals, income tax on the taxable part of Social Security benefits, and interest on current trust fund assets.

In the Social Security Administration’s 2013 Annual Report, the Board of Trustees projected trust fund exhaustion by the year 2033. It also projected that in 2033, the first year of projected insolvency, the program would only have enough tax revenues to pay about 77% of scheduled benefits. That percentage would decline to 72% in 2087. If that happens, the monthly payment of benefits could be delayed, disrupting the predictability of the current payment schedule.

A recent study by the Congressional Research Service (CRS) concluded that the sooner Congress acts, the smaller the changes to Social Security need to be. Making changes now would spread the costs over a larger number of workers, and over a longer period of time. Changes could be slowly phased in, rather than making abrupt cuts in benefits and/or increases in taxes, thus allowing workers to plan in advance for their retirements.

Relying solely on government benefits for retirement is risky. Proactive retirement plans may be a better option for your golden years. The current tax code provides for numerous retirement incentives including Traditional IRAs, Roth IRAs, 401(k) plans, self-employed retirement plans, and a Saver’s Tax credit for lower income individuals. A little saved each year can become a significant retirement income source in the future.

If we can help you plan for your retirement, or explain the various tax-favored retirement plans available, please give this office a call.