• Michelle Nicholson

Social Security Is Insolvent in 12 Years If Nothing Changes: Retirement & Maryland$saves



Two-thirds (66%) of workers report they are currently saving for retirement.

Financial security is a growing concern for many American workers. For the past 80-plus years, American workers have paid into Social Security and benefitted from collecting a significant portion to support their living expenses during retirement. The traditional intentions of Social Security were to offset retirement costs as a three-part strategy toward a diversified retirement portfolio or nest egg. The three-part approach included a combination of the American worker saving for and contributing to a pension, personal savings, and social security. Unfortunately, many studies indicate that more than half of Americans are behind in retirement savings, with a quarter unsure if they are on track or not. Other studies suggest that more than half of Americans are behind in retirement savings, with a quarter uncertain if they are meeting their retirement goals. And 51% of Americans are concerned about their retirement due to the COVID-19 pandemic.



Social Security Is Decreasing

In approximately 12 years, or by 2034, the Social Security trust funds will be exhausted. This date is 24 years earlier than the Social Security Administration previously estimated. ​The change will require the United States to utilize what is remaining, ongoing tax revenue, to fund payments with an understanding to recipients that benefits will decrease by around 25 percent. Increased life expectancy and increased dependents are two factors impacting the depletion of funds. The change also beckons additional legislation to support longevity. How much more and longer can the American worker support social security when they could receive only a portion of their contribution?


"Absent any change in law, the Social Security trust funds — the financial accounts that the program draws from when annual payments to Americans are larger than annual tax collections — will be out of money in about 12 years." AARP

Understanding Social Security

A dedicated payroll tax funds Social Security. Employers and employees each pay 6.2 percent of wages up to the taxable maximum of $147,000 (in 2022), while the self-employed pay 12.4 percent. Understanding the historical and current implications are essential. Social Security is an anti-poverty program authorized by legislation in 1935. According to the Center on Budget and Policy Priorities, 21.7 million more Americans would be below the poverty line without Social Security benefits. ​Social Security, the Old-Age and Survivors Insurance, Disability Insurance, and Supplemental Security Income collectively provide monthly payments to eligible retirees, surviving spouses, children, qualified disabled workers, and their families. Although most of whom Social Security keeps out of poverty are older adults, i.e., eligible retirees, it is essential to understand that 6.9 million recipients are under age 65, including 1.2 million children.​​​



Are You Saving Enough

Having a pension is a fundamental strategy within the traditional retirement portfolio. Even though an estimated 176 million workers will work in Old Age, Survivors, and Disability Insurance (OASDI) covered employment in 2021 and contribute towards it, 45% of the workforce within the private industry have no access to private pension coverage. And this is important to highlight because studies have found that an employer-sponsored retirement savings plan is a crucial factor in whether Americans save for retirement. In Maryland, nearly one million private-sector employees have no employer-sponsored retirement savings plan. And it does not help that many Americans begin claiming Social Security before their full retirement age of 67, so they don’t actualize their full benefits.


Statistic: Two-thirds (66%) of workers report they are currently saving for retirement.


Statistic: Only 18% of those without access to an employer-sponsored plan said they have any retirement savings.


To gauge whether you’re saving enough, Bankrate cited the following recommendations from Fidelity Investments by age:

  • By age 30, you should have at least your annual salary saved.

  • By age 40, you should have saved three times your salary.

  • At age 50, you should have six times what you earn annually saved for retirement.

  • By the time you hit age 60, the goal is to have eight times your salary saved – and it should reach ten times your salary by age 67.

"Millions of Americans will soon run out of money." JB Bryant

Retirement Planning: Is It Too Late

I understand the numbers look daunting. And the United States in the year 2022 is just arriving at a point where mandates to educate high schools in financial literacy are gaining traction. So, unless this information was shared or your company offered a pension and required retirement engagement, you might not have fully considered the implications and utilized the tax benefits to maximize your retirement benefits. Yet, I will still say no - it is not too late.



"Ever since I've been saving money and not spending it on jewelry, I've been getting way richer." - 21 Savage

Planning for retirement will require prioritizing some goals to extend your ability to live comfortably in the future. Yet depending on your age, time may not be on your side for a more significant nest egg, but it is not unreachable. I suggest small business owners and employees consult a Financial Advisor. While I do not endorse the level of services, I have listened to several podcasts hosted by JB Bryant, Principal Advisor and Owner of Afro Economics, and have found her delivery and content to be top-notch. While I will always encourage individuals to support small businesses by enjoying their paid services, I also appreciate that Ms. Bryant offers free membership to ensure financial literacy is accessible to everyone.



"Financial peace isn't the acquisition of stuff. It's learning to live on less than you make, so you can give money back and have money to invest. You can't win until you do this." - Dave Ramsey

Maryland Adopts Retirement Strategies

As this article has mentioned, with Social Security decreasing, Americans will need to prioritize saving for retirement to avoid increased poverty. Maryland is going the extra mile by introducing legislation encouraging business owners and corporations that do not currently offer a qualified retirement savings plan for their employees, an incentive to support employee savings for retirement. In 2016, Maryland introduced legislation entitled Maryland Small Business Retirement Savings Program and Trust, also known as MarylandSaves. MarylandSaves is an automatic workplace retirement and emergency savings program.


The objective of MarylandSaves is access and simplicity for the employee to encourage retirement savings that require the employee to opt-out of the benefit. Additionally, the program offers a SS Bridge option that will allow employees to use their Maryland$aves as income to defer claiming Social Security and thereby increase their benefit by 8% for every year they defer their Social Security application. While an employee can retire at 67, utilizing their available MarylandSaves funds and defer tapping into Social Security for three additional years until age 70, they could increase their SS benefits by almost 50%. MarylandSaves is a valuable tool to attract and retain employees by giving them a simple and secure way to save through automatic payroll contributions to a Roth IRA.

Employer Benefits

Employee Benefits


  • No cost for employers

  • Getting started is fast, easy, and secure

  • Works seamlessly with any payroll process

  • Stay competitive by offering a great benefit to your employees

  • $300 waived state annual report filing fee



  • It’s your money — if you change jobs, your money and your account go with you

  • A secure, simple way to save for retirement

  • Flexible contribution levels to meet your needs

  • It’s voluntary — stay enrolled automatically or opt-out and re-enroll later

  • Automatically save your first $1,000 in our emergency savings feature


Launch Your Maryland Saves Account


There are three simple steps for employers to get started.


If you currently offer a retirement plan, you will need to verify your retirement plan to be exempt from participating in MarylandSaves.


With MarylandSaves, employers can help their employees save for retirement in a convenient Roth IRA — also called a WorkLife Account — that employees can take with them even if they change or leave their job. The MarylandS


aves completes its pilot program in August and will launch in just a few days on September 6, 2022 - one day after Labor Day 2022. To learn more about the MarylandSaves program, and get started, visit https://marylandsaves.com.

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