8 forecasts for your financial future

You've come a long way since Money Magazine first hit the stands 35 years ago. So what do the next 35 years have in store for you and your wallet? We asked eight experts for their predictions.

The future of social security
Jason Furman, an economist and former policy adviser to the Clinton Administration, is a senior fellow at the Brookings Institution.
Jason Furman on:
The future of social security
Look for a fix - but with fewer benefits and higher taxes.

Wondering what it will be like to retire in five years? If you're the typical hard-working middle-class to upper-middle-class American, you'll probaby be eligible for about $25,000 a year in Social Security benefits - not much, but enough to provide a financial cushion. You'll likely also receive Medicare, with the choice of the government-run plan or enrolling with a private insurance company.

If you are retiring in 35 years, forget all that. According to the latest predictions by the Social Security Trustees, if the government does not take action, the Social Security trust fund will be exhausted in 2042. (That doesn't mean Social Security would be gone forever. Even if no changes are made, the program would still collect enough payroll taxes that year to pay 75 percent of scheduled benefits.)

Medicare will be deeper in the red. The trust fund that covers hospital insurance will be long gone (in 2019, according to the latest projections), so the government will have to devote a larger and larger share of the budget to pay for it.

Before you panic, know that events won't unfold like this. Social Security and Medicare are both popular programs, which means they will both be around in 35 years. Sometime between five and 35 years from now, Congress will pass a Social Security fix. (Given that the last major fix passed in 1983, just months before the trust fund was to be exhausted, I suspect it might be closer to 35 years from now.)

As you might expect, this fix will likely include benefit trims and revenue increases. Some of the revenue increases will likely be in the form of higher taxes on high earners - probably extending payroll taxes past the current cap of $97,500. But extra revenues from high earners will not be enough to pay for the benefit levels that Democrats want. Meanwhile, Republicans are unlikely to support higher payroll tax rates.

One plausible compromise: Any additional revenue would come in the form of mandatory, add-on contributions to individual accounts. For example, everyone would be required to invest an additional 3 percent of his or her pay in a limited set of diversified stock and bond funds that are automatically turned into an annuity at retirement.

That would be a profound change for the one-third to one-half of families who are saving too little and have no exposure to the risks and rewards of the stock market.

John
Bogle

Chris
Mayer

Margaret Regan

Paco
Underhill

Ray
Kurzweil

Uwe Reinhardt

Jason
Furman

Aubrey de Grey
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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.