The Social Security Clock Is Ticking. Here's What Advisors Should Watch.

For young advisors, "there is increasing concern about Social Security and will it still be available," Ted Rosedale, NARSSA's chief operating officer, added during the interview.

NARSSA is a certification and education group helping financial professionals improve their knowledge about Social Security claiming options. "It's so complex. More people are feeling overwhelmed by Social Security," Rosedale added. "What we're doing is raising awareness around the importance of planning for Social Security."

The American College of Financial Services said in February that it's partnering with NARSSA to distribute its RSSA Social Security designation program.

ThinkAdvisor caught up with Shedden and Rosedale to discuss the current state of Social Security and what they think lawmakers will need to do to shore up the program.

THINKADVISOR: What are your thoughts about Sen. Ted Cruz's recent comments that Trump accounts are Social Security accounts?

SHEDDEN: The indication is that they [Trump accounts] may be the first step to privatization of Social Security. They are individual retirement accounts but they aren't tied to any type of employment. I'm in favor of all individuals to do whatever they can to prepare for retirement. In that way, it's a good thing. I'm not in favor of these [accounts] as a way to replace Social Security. I'm very much in favor of making changes to the Social Security program to keep that going. There's definitely a lack of saving. I'm just not sure that [Trump accounts are] going to be beneficial to all segments of the population. That's kind of moving into the realm of replacing Social Security.

THINKADVISOR: What bills are you watching? Do you see any movement on any this year?

SHEDDEN: I would hope some of them would move ahead.

The Supplemental Security Income Savings Penalty Elimination Act, I'm definitely in favor of that one. The Social Security Expansion Act, to phase out maximum taxable ... there is support for that and also the increase in the payroll tax — a slow increase from 6.2% to 7.2% — that has broad acceptance.

The Supplemental Security Income (SSI) eligibility rules, that have not been updated in almost 40 years, penalize people for saving for emergencies or trying to enter the workforce.

The most outdated rule is the asset limit, which has remained at $2,000 for individuals and $3,000 for couples since Congress last adjusted them for inflation in 1984. This creates barriers for those seeking to get jobs and save.

The bipartisan SSI Savings Penalty Elimination Act would increase the asset limit from $2,000 to $10,000 for an individual and from $3,000 to $20,000 for a married couple.

Increasing the limit empowers people to prepare themselves for a financial emergency and allows them to enter the workforce without worrying that they will lose their eligibility for SSI by saving too much.

Doubling the limit for married couples, relative to single individuals, eliminates the existing marriage penalty that punishes an SSI beneficiary for getting married.

The Social Security Expansion Act includes a number of changes, but the one that will have the most significant impact in the longevity of the SSA trust funds and benefits for future workers is lifting this cap and [subjecting] all income above $250,000 to the Social Security payroll tax.

I feel like there's a lot of aspects of the Social Security program ... that will be tweaked to keep the program going, as it has over the last 90 years, like the 6.2% payroll tax. That hasn't changed since 1990. A gradual increase in that is going to go a long way in expanding the longevity of the program, and shoring it up for future generations. Younger generations just don't feel like Social Security is going to be there for them.

THINKADVISOR: Which bills or proposals aren't you in favor of?

SHEDDEN: The six-figure limit, $100,000 per couple [under a proposal floated by the Committee for a Responsible Federal Budget]. I'm not in favor of that. To me it doesn't jibe with the original intent of Social Security. The more there are fixed figures like that — today it's $100,000 — that's just one more thing that we're trying to keep up with, like the cost of living adjustment. Setting a specific numerical amount ... is greatly different across the United States depending on where individuals live.

There are enough rules and ways to change the Social Security program to keep it solvent within the existing rule structure that's been there.

THINKADVISOR: We're not going to see passage of any Social Security related bills this year, correct?

SHEDDEN: I don't think so. This piecemeal changing of things [via bills], I would like Social Security Administration actuaries to be examining this and giving feedback on how much this is really going to help the program.

We're getting closer and closer [to the fourth quarter of 2032 Social Security trust fund insolvency date], and the anxiety level and concern is increasing. That's the No. 1 concern.

And then the new [Social Security] Trustees report hasn't come out, as it should have, in April. They did this last year and they said they'd be releasing it piecemeal as things became known. That didn't happen and it can't really happen ... because there's not a way to release it in little pieces; hopefully that will come out soon. Every year it really gives an indication of how much closer we're getting.

THINKADVISOR: What do you say to advisors who are counseling clients? Social Security is a chunk for even wealthier people.

SHEDDEN: It very much is. That's definitely something that people misunderstand. It's important to all workers, even if they've earned the maximum amount — they want to make sure they're making the right claiming decision.

And I think our view, as a company, we want to provide individuals now and going forward with the current rules; we want to prepare them; we want to be speaking very accurately about what has passed, what hasn't — like the misunderstanding about no taxes on Social Security [related to the senior deduction, $6,000 for individuals over 65 and $12,000 for married couples filing jointly, originally enacted as part of the One Big Beautiful Bill Act in 2025.]

And to also plan for the worst case and understand how that could affect what they're able to do with our software. If there is a 20% or 28% cut in [Social Security benefits], we can help them plan for that.

THINKADVISOR: Do you think Congress will wait to the last minute to do something about Social Security?

SHEDDEN: There are individuals and groups of congressmen and senators that are submitting these bills, but in my mind, the real solution is going to need much more of a coordination and a bipartisan agreement.

THINKADVISOR: Which could include cuts in some form.

SHEDDEN: It could. There are a lot of levers within the rules of Social Security that can be adjusted ... it really requires a package of changes.