Can Social Security Be Saved Before 2035?
In this episode of Breaking Battlegrounds, hosts Chuck Warren and Sam Stone welcomed back Gary Gygi—seasoned financial expert and president of Gygi Capital Management—to discuss a looming issue that could impact millions of Americans: the future of Social Security.
Gygi explained that unless Congress acts, Social Security beneficiaries could face a 20–25% reduction in benefits by the year 2035. The core issue? The math simply no longer works. When Social Security was created in 1935, life expectancy was significantly shorter. Today, Americans are living 20 years longer on average, meaning more people are collecting benefits for longer periods, while fewer workers are contributing.
The discussion turned to current proposals aimed at fixing the imbalance:
A bipartisan proposal by Senators Bill Cassidy and Tim Kaine suggests creating a separate investment fund, outside of the traditional Social Security trust, that would be invested in the market for 65–75 years to generate returns and offset future shortfalls.
Democrats favor lifting the income cap on Social Security taxes (currently around $176,000), allowing high earners to contribute more.
Republicans, on the other hand, lean toward gradually raising the full retirement age from 67 to 70, reflecting increased life expectancy.
While the proposals vary, Gygi emphasized that some form of legislative action is inevitable. “If nothing is done,” he warned, “we’re looking at the largest financial revolt in U.S. history.”
The episode serves as a wake-up call and a roadmap for individuals and policymakers alike. Whether through increased taxes, delayed benefits, or smarter investments, the time for action is now.
Transcript
Sam Stone: Welcome back to Breaking Battle Rounds with us, Chuck Warren. I'm Sam Stone. Our next guest up today is a regular from the podcast segment, if you follow that one, Gary Gygi, seasoned financial expert, former mayor and president of Gygi Capital Management, who's on today to talk Social Security, Chuck.
Chuck Warren: Yeah, Gary, so supposedly...
We won't be able to have full benefits of Social Security in 2035. People getting checks will only get 83%. What do people need to do to prepare for this if the government doesn't do anything?
Gary Gygi: Yeah, so I love this discussion. I think there is a lot of things that people need to know. So let's just kind of dig into this because if Congress does nothing, you're right, Chuck. There will be reductions in benefits. of 20 to maybe 25 percent. So something has to happen between now and then.
It's in my opinion that something will. And so if we kind of back into this a little bit. Social Security was started in 1935. At that point, men were living into their early to mid 60s. Women were living slightly longer than that to their mid to maybe late 60s.
We're now living men, early eighties, women, mid to late eighties. So we're living in about 20 years longer than when it was originally created. Hence the problem. The math is not working. So you have not as many people putting money in as we'll be taking out. And that happens in about eight years. So if that happens,
then you're going to see the greatest revolution our country has ever seen because nobody wants that to happen.
Sam Stone: No, not even remotely close. Gary, one of the things – I've never asked this question of a financial professional before, but maybe it's a little out of left field for you here. But Social Security was actually designed as an insurance program, not an investment fund necessarily, right?
So is that one of the things that has been hampering the management of the fund is that they don't view it entirely as a market fund?
Gary Gygi: Yeah, so true. So I don't know if you heard this week or not, but Senator Cassidy, Senator Kaine are talking about some new legislation, which is addresses exactly what you're talking about. And that is that the social security trust funds are in U.S. treasuries. And some of them were issued a while ago. So they
you know, earning one or two or 3% and due to inflation, they're losing money. So what the two senators are talking about is that this should be invested in the market. And their strategy is to take existing funds because the government borrows about $300 billion a year, puts it into escrow for Social Security.
And so they're talking about creating a different fund, not the Social Security Trust Fund, but a different fund with this money, putting it for 65 to 75 years away to offset shortfalls in the social security system. Now, that's their idea. There's two other ways that people talk about. They get tossed around a lot.
Democrats like one of them. Republicans like another one. So if you are working getting W-2 wages, then your income for Social Security benefits is taxed up to about $176,000 this year. Democrats would like to see that lifted to an unlimited level. So this would affect middle income to wealthy people and so their Social Security input would increase tremendously for some of them.
So that's what the Democrats would like. Obviously Republicans don't want to raise taxes on particularly the middle class, what they would prefer is to adjust the age at which you can get full retirement. Now, you can get partial benefits at age 62, but for most people, you get full retirement right now at around 67.
I wouldn't be surprised for the Republicans to say, we should move this back to age 70 because we're living longer. So those are the two things that are being talked about a lot I wouldn't be surprised to see some of all of those things brought together in order to create a solution to this.
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