We've discussed this before, but thanks for the link to the article. Looks like we're in the same place, not too shabby.
I'm betting they'll make changes (means testing, raising eligibility age, raise collected amount, etc.) in the next few decades.
But even if no changes are made, ever, 80% is covered by incoming funds.
Tell me again why someone would assume they won't get any SS at all?
Personally, since I'm just 35, I don't use SS projections into my planning, and only look at my overall portfolio and dividend income for now. As I get closer to 55, I'll start seeing what the SS landscape looks like at that time. So, effectively, I don't assume any SS for now.
It is true that changing nothing in the current laws will still result in funding 80% of your projections...but do you really think that the lower/middle class will accept 80% of their projections at retirement, given all the people that apparently rely solely on SS for the majority of their sustenance? If they can barely make it now on 100% of their projections, they won't make it on 80% of it 30 years from now. Which will require massive redistribution to bump up the lower/middle class to 100% of their projections - a bump that will come at the expense of either wealthier SS recipients, and/or wealthy salary earners.
SS is a different beast from projecting investment returns and inflation. For returns and inflation, they are actually more random and unpredictable, to a certain degree - but you can get a glimpse of prior years to see what might be in store for the future.
However, when it comes to SS....while it is, in a sense, "guaranteed" to be there (as I don't think anyone would expect it to be completely done away with and something else put in place), it is actually - in some degree - more difficult to predict than investment returns and inflation assumptions! The reason being that it is mainly subject to the whims of whatever politicians happen to be in power at any particular point in time, and whatever deal they happen to strike. You can't buy a SS index fund and be 'guaranteed' to have a return that matches the market overall.
With a capitalist society, you can expect companies to - by and large - focus on maximizing profits. Because of this, you can look to industries/countries/products that you think might produce more profits longer term, and then invest accordingly. But when it comes to politicians, you are almost guaranteed to NEVER have a solution that is truly in the best interest of the country or of the citizenry overall, since it is usually special interests and personal whims (on both sides of the aisle) that help craft the particulars of major legislation like SS laws, rather than mathematical modeling to produce the most efficient, beneficial result.
As such, while you can overweight your portfolio in oil stocks if you think peak oil will bring about massively higher oil costs, you have no way of knowing what any particular SS reform legislation will look like and how it will effect you. Just as uncertainty spooks investors in equities, and leads to mispriced securities, many fiscally prudent people planning for an ER will price that 'SS uncertainty' into their projections.
Because of simple demographics (the lower/middle class reference earlier), the only way to bump up the lower/middle class to 100% of SS projections is to seriously hit the wealthier SS recipients/income earners, either through higher SS taxes now while working, and/or more taxes on your SS/interest/dividend income when you're retired. Either way, the upper-middle and upper class
will pay more. What exactly you will pay is anyone's guess...but since some on personal finance forums earn a moderately high income (and/or save substantial assets because of fiscal prudence and responsibility), they will be hit somehow, someway. And since it's unknown what form that higher tax will take, some might simply assume zero SS, since between higher taxes now and/or in the future, it could effectively wash out whatever SS they might receive, and be a reasonable 'worst case safety assumption'.
Some people build in safety assumptions with a WR of just 2.5% or 3% to be on the slightly safe side (even if they're 55). Some people assume just a 1% real rate of return for their investments to be safe. Others might be safe and simply ignore SS, and use it as gravy money for whatever the end result is when they collect, given the uncertainty looming.