Social Security Set to Go Bankrupt Much Sooner Than Expected

By Scott Bardelli, Agora Financial

According to a recent study out of Harvard and Dartmouth, Social Security could be headed for bankruptcy much sooner than anticipated.

The controversial study now shows the Social Security Administration has been underestimating the costs of the safety net by at least $1 trillion since 2000. The trust fund is projected to be bone-dry by the year 2031.

This could pose a major problem for the estimated 70 million baby boomers that have either recently retired or are planning on retiring in the near future.

These are the same Americans that have paid into the system their entire working careers… only to find out that the money is going to run out when they need it most.

Is there any hope to turn this program around, and to save the retirement dreams for millions of American baby boomers?

To answer, we simply have to look at our friends to the north — the Canadians.

After realizing that the Canada Pension Plan (as they call it) was on the brink of bankruptcy, they decided that the only way to make the system flourish was to remove the Canadian government from the equation.

And it worked…

As a result, cash reserves for the Canada Pension Plan started with $36 billion… and by 2004 reserves had more than doubled to $77 billion.

That number has since grown to over $219 billion… a six-fold increase from where they started.

And it’s estimated that total cash reserves for the Canada Pension Plan are set to hit over $800 billion by the year 2040.