Social Security – Some Good News!

The Social Security and Medicare Board of Trustees released their annual report.  Solvency of both programs has been a concern for years.  The good news is the report showed both Social Security and Medicare to be in a more positive position, as of now.

The Social Security Trust fund is now scheduled to deplete in 2034, one year later than last year’s projection.  If we do not take action, benefits will need to be reduced to 77%.

The Disability Trust fund is NO longer projected to be depleted with the 75-year projection period.

Medicare Part A (Hospital Insurance Trust Fund) is now projected to pay 100% of benefits until 2028, 2 years later than what was projected in 2021.  Without action, in 2029 the projected tax revenue will pay 90% of scheduled benefits.

Most of you know, I do believe that Social Security and Medicare will be reformed to prevent reduced benefits down the road.  When will that happen?  How will it work?  I have my opinions, however in this environment, it’s very challenging to anticipate what our government may do with these programs….  That’s a shot at both sides of the aisle!

In the Trustees report, it is suggested to immediately reduce Social Security’s projected shortfall, we would need to increase the combined Social Security payroll tax rate from 12.40% to 15.64%. This is a 3.24% increase. 

Currently, employees pay 6.2% for Social Security (not including Medicare) and employers pay 6.2%, equaling the current rate of 12.40%.

Are markets due for a bounce higher?

Over the weekend, I read more pessimistic articles than I can recall.  From JP Morgan to Goldman and others, most believe we are headed for a recession next year, with a few believing it will happen later this year.

The market indexes have finished lower 8 out of the last 9 weeksMoves higher typically happen when it’s not obvious.  I’m NOT suggesting we ARE going to bounce higher for a little while, however I will not be surprised.

Last week, the jobs report was both good and badGood, as we created 390,000 more jobs with an unemployment rate of 3.6.  The bad, as the report did not offer any reason for the Fed to consider less interest rate tightening.

Two important events are on the near-term horizonFirst, we have this Friday’s Consumer Price Index (CPI) number for May, estimated @ 8.2%.  The second will happen next week, when the Federal Reserve meets to again raise rates by .50%.  That’s pretty much a certainty, however what Powell says will be highly scrutinized.


  • The current Forward Price to Earnings ratio for the S&P 500 now stands at 18.3%
  • Tax revenues collected by our Federal Government hit all-time record last year.  4.05 TRILLION!! This year, the Government is on track for another record….  Interesting!
  • As of last Friday, value-stock mutual funds are down between 5 and 7.5%, YTD.  Growth-stock mutual funds are down 22.5%?  It’s important that your portfolio is positioned appropriately.  For a review of your situation (or if you know someone who may benefit from a review), please feel free to contact our office!
  • Euro inflation was reported last week at 8.1%
  • Did you know the IRS has a mission statement?Provide America’s taxpayers top-quality service by helping them understand and meet their tax responsibilities and enforce the law with integrity and fairness to all.
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