Arguably the greatest quarterback of all-time, New England Patriots Quarterback Tom Brady is in the final phase of his Hall of Fame career. Five Super Bowls, 13 pro bowls, 3 MVPs, 196 wins (most by a QB), one best selling book, and 11 deflated balls (sorry, had to). Remarkable numbers for an impressive career that was kick started by an Adam Vinatieri field goal that clinched his first Super Bowl in 2002 over the St. Louis Rams.
New England fans remember Super Bowl XXVI vividly. Casual sports fans probably remember it as well. Others may recall 2002 as the year Kelly Clarkson won the first season of American Idol or Eminem’s Lose Yourself. In hindsight, sixteen years ago just doesn’t seem that far away.
Shift the yardsticks of time forward, and we’re a hall-of-fame QB career away from 2034. At which point, Tom Brady will (probably) be retired. And while it’s safe to say his retirement is secure, people depending on our Social Security Trust fund have reason to worry. Absent Congressional action, 2034 is the year it goes insolvent.
This pending insolvency is largely driven by demographics. The baby boomer generation is retiring at a pace of 10,000 people per day and the workers to retirees ratio is dramatically shrinking. What used to be a 42 to 1 ratio will be 2.5 to 1. There are simply not enough workers per retiree to pay Social Security benefits as currently constructed. Trustees have been ringing the alarm bells about this for decades, but their warnings have fallen on deaf Congressional ears.
The key to Tom Brady’s success is preparation. The oft-made fun of, yet seemingly effective TB12, is a fitness/nutrition/lifestyle plan that has Tom Brady playing at a high level into his 40s. Though Tom Brady didn’t wait until he turned 40 to start preparing for the future. He knew frequent and thoughtful preparation would lead to a longer career, just as those values lead to a higher probability of winning football games.
Congress should take notes.
The 2034 insolvency date is not a countdown clock until Congress needs to act. To stave off real consequences, Congress needs to prepare now. Absent changes, a 21 percent cut will fall on beneficiaries. Social Security is currently responsible for providing at least half of the monthly income for 3 out of 5 retirees and is keeping 15 million Americans out of poverty. Tens of millions of Americans rely on Social Security. Tens of millions more will rely on Congress to keep it going.
Preparing for the demographic onslaught is especially important for younger generations. The longer Congress waits to fix Social Security, the more the burden will fall on younger generations. This year, the Social Security shortfall (benefits going out are larger than revenues going in) is just $1.7 billion. But in 2027, it will be $169 billion. That gap can be closed equitably among generations, or continually delayed so that millennials and gen Z will be the worker bees to pay off the benefits older generations have promised themselves. This is a generational wealth transfer to the tune of trillions of dollars.
The good news is, of all the broken programs that need reform – Social Security is the easiest one to fix. Unlike the complexities of Medicare, Social Security is a simple as adjusting a few levers. A combination of adjustments to the retirement age, taxable income cap, tax rates, and benefit formulas will sustain the Social Security far beyond the 2034 insolvency date. What is needed is political will. And to get that political will we need a clear and honest conversation about the state of our nation’s fiscal picture. We need our leaders to stop deceiving to the American people and let them know that we need to a rigorous diet and exercise plan for the budget. FB34