Marcia Mantell Has Never Been This Worried About Social Security

Mantell, president of Mantell Retirement Consulting, founded her Social Security education and training firm in 2005, and although benefit claiming behaviors have improved since then, the financial outlook of the program is raising serious alarm.

Reaching the two-decade milestone, Mantell said, offered the chance to reflect on the opportunities she’s had to educate clients and the general public on Social Security and Medicare — including through regular appearances in ThinkAdvisor articles and podcast episodes.

The June anniversary also coincided with passage of President Donald Trump’s signature tax and spending legislation. While some provisions, such as a deduction for lower- and middle-income taxpayers older than 65, could benefit seniors, Mantell worries that the anti-immigration policies bolstered by the legislation could harm the economy and further jeopardize Social Security’s finances.

Adding to Mantell’s concern, prominent public figures continue to spread misinformation about the financing and benefit structures of both Social Security and Medicare. Likewise, Congress seems unable to address the growing funding gap that could result in potential benefit cuts of about 20% within the next 10 years.

“The good news here is that I still firmly believe Congress will act to shore up both programs,” Mantell said. “They know that senior voters have a lot of political power and won’t accept big cuts. Unfortunately, they’ll likely wait until the last minute to make fixes. That will increase the pain and likely result in significant additional concern and distrust among the taxpaying public.”

Her work as a Social Security advocate has always felt important, Mantell said, but the next five years will be “the real crunch time” when it comes to educating financial advisors, their clients and policymakers about the importance of Social Security and Medicare for the retirement prospects of the vast majority of Americans.

A 20-Year Mission

Mantell started her career in the retirement field at Fidelity, initially working for the firm’s internal marketing and advertising unit. At the time, the concept of the individual retirement account rollover was “catching fire,” she said, and helped to fuel Fidelity’s fast-growing platform.

“It’s interesting, because rollovers had existed in the law before that time, but the strategy was suddenly kind of discovered and popularized,” Mantell explained. “Fidelity was really on the forefront of driving IRA rollovers. Before that, young people and career changers were just cashing out their 401(k)s as they went from job to job.”

Another notable focus for Mantell was required minimum distributions.

“Given the timing and the demographic trends, it makes sense that RMDs were really starting to become an issue for 401(k) and IRA account owners at that time,” Mantell said. “That was the time when these vehicles really stopped being just for accumulation and became a meaningful source of retirement income. For my career, it was really a lucky time to get connected to these topics.”

As her expertise on key retirement topics grew, so did her responsibility at Fidelity. After about a decade, she had become a vice president helping to lead the IRA unit. Later shifting to become an advisor, she found that neither role allowed for enough work-life balance.

“It was really a wonderful experience at Fidelity, but I was just so busy,” Mantell recalled. “My older child was going into ninth grade, and my younger one was going into fourth or fifth grade. I just never saw them enough, so I decided to strike out on my own. I very quickly found the Social Security niche, but I can’t necessarily say I had some grand vision of where I would end up.”

Building her Social Security expertise took “a ton” of research and reading, Mantell recalled, and she credits such leaders as Alicia Munnell at the Center for Retirement Research and Kathryn Hopkins at Fidelity for carving out a path to focus on “income as the outcome.”

Twenty years on, Mantell said, the decision to become an entrepreneur remains one of the best she has made.

“I’ve always remained very busy, but I’ve had more control,” Mantell observed. “I’ve gotten to go to the kids’ soccer games and travel with them — all the things you hope for. And being able to help people on such an important topic every day makes it just that much more special.”

What Comes Next

Mantell said she views the new $6,000 deduction for taxpayers older than 65 as a positive development. But, as she recently told ThinkAdvisor, the characterization of the tax break as “no tax on Social Security” is “seriously misleading.”

“Yes, it’s true that you can do the mental math and think about the new $6,000 deduction as offsetting some or even all of the taxes a higher-income beneficiary may be paying on their benefit,” Mantell said. “But, I think it is harmful to tell people that taxes on Social Security are gone. They will still be on the next tax return you file, for example, and that could catch clients by surprise.”

More broadly concerning for Mantell is the Social Security Trustees report, published several weeks ago. It shows that the asset reserves of the Social Security Old-Age and Survivors Insurance Trust Fund, which pays benefits to retirees, will become depleted in 2033, with 77% of benefits payable at that time.

As Mantell pointed out, the OASI and disability trust funds — which under current law will be combined to pay benefits — are set to have enough dedicated revenue to pay all scheduled benefits until 2034, with 81% of benefits payable at that time. That’s one year earlier than projected in 2024.

A Message for Young People

While Mantell expects that Congress will eventually act to prevent catastrophic benefit cuts for current and near retirees, the younger generations likely will need “to pick up the slack,” she said.

“[That’s] both by paying more in income taxes and by receiving lower benefits farther out into the future,” Mantell said. “I feel bad for people in my daughters’ generation, for example. Social Security will be there for them, but it might not be as meaningful.”

Young people, though, are already broadly committed to saving for retirement in 401(k) plans and IRAs, Mantell noted.

“You can put yourself in a better position by starting the savings journey as early as possible and by trying to save a little bit more, in order to hedge against future potential cuts to Social Security,” Mantell concluded.