How well do you understand Social Security? If you're a baby boomer close to retirement age, you might have more knowledge than most. If you're not, the only thing you may know about Social Security is all of the talk that the fund may be bankrupt before Generation Y retires. Whether that's true or not is a topic of debate, but there's more to social security than the retirement program. A bigger issue is only four years away and it's an issue that you've likely heard little about, but may have a big impact on more than 11 million Americans.

Two Parts
What you likely know about Social Security is that a portion of your paycheck is taken each pay period to fund the account. Once you reach retirement age, you'll be able to draw on this fund for additional income. Much like a corporate pension, Social Security guarantees you an income once you retire. It's not enough to live on, but every little bit helps. What you may not know is that there are two parts to Social Security: The retirement plan that supports 40 million senior citizens and a disability program that currently helps 11 million disabled Americans, according to The Washington Post. The Social Security Disability program is designed to supplement the income for Americans who are unable to work due to a disability. It pays an average of $1,111 each month and pays out more than $132 billion annually.

Why It's Nearly Bankrupt
Critics argue that what is considered a disability has changed, and is causing the fund to pay out an increasing amount of money. Since 2007, applications to the Social Security Disability program has risen 30% resulting in 23% more Americans receiving payments. The plan, originally designed for those who suffered catastrophic illnesses like strokes, heart attacks and cancer, is now routinely tapped for illnesses like depression, back pain and chronic fatigue syndrome. Although these conditions can be disabling, many recipients are still able to work in light-duty environments, according to critics. While there is supposed to be a periodic review of all cases, the program's budget doesn't allow it to conduct these reviews resulting in only 1% of those who enter the program eventually giving up their disability check.

Baby Boomers
Not only do the current problems threaten the program, but over 70 million baby boomers approaching the age of 50 are projected to file for benefits in increasing numbers. According to disability experts, the average age for disability filings is 50 and this could be what finally gets the attention of lawmakers that have largely ignored the growing crisis with the disability program. If the Social Security Disability trust fund runs out of money, experts say that payouts will have to decrease. Because the program is barred from running a deficit, payouts would decrease by 20% because projections show that only 79% of the program will be funded by payroll tax revenue.

What You Should do
Just as experts advise people not to rely on Social Security for sustaining retirement income, you should not rely on the disability program for any future income if you become ill. Consider disability or long-term care insurance, especially if you're 50 or older. Although Congressional members who are sounding the alarm about the program believe that funds will be diverted to fund it, the average payout of $1,111 will likely not provide sufficient income even after inflation adjustments and other payouts.

The Bottom Line
You may not have known of the Social Security Disability program, but much like the retirement program, it suffers from decreasing revenue and increasing applications. Unlike the retirement program, the disability program is only four years away from insolvency making the problem much more immediate. According to The Washington Post, lawmakers believe that funds will be diverted from other programs to finance the shortfall in the future.

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