The Congressional Budget Office (CBO) estimates the Social Security Trust fund will be depleted in 2029. If the fund is exhausted, it doesn’t mean Social Security benefits are gone, but it will mean reduced benefits for all. Checkout this 3 page slide presentation. If you’re interested in receiving the previous publications in the series, please message. For more information on retirement topics including Social Security, visit the Retirement Education Center on my website www.beaconpwm.com/resource-center/retirement

1. PAYING
AMERICA’S
BILLS
What Investors Should Know About how the U.S. Government Manages its Finances
Exploring Entitlement and Demographic Trends
The largest portion of the federal budget comes from manda-
tory spending requirements—often referred to as entitlement
programs. The largest of these programs are Social Security,
the main health programs,1
and income security programs.
When Social Security was signed into law, the average life
expectancy was about 62 years. The program was intended
to provide income security to those who lived beyond their
years. It was not meant to be a retirement plan as many think
of it today.
Currently, the Congressional Budget Office (CBO) projects
that the Social Security Trust fund will be exhausted by 2029.2
This would not spell the program’s end, but the Social Security
Administration would be limited to paying no more per year
than received in annual revenues.
It is very unlikely, in our opinion, that politicians would allow
a sudden significant reduction in benefits, but the fact remains
that if the program is left unchanged, benefits would be reduced
by an estimated 29 percent in 2030.2
A CLOSER LOOK AT SOCIAL SECURITY
INITIALLY, JUST 222,000 AMERICANS
RECEIVED BENEFITS;TODAY OVER
60 MILLION
3
WILL RECEIVE THEM—A NUMBER
THAT WILL CONTINUE TO GROW
PresidentFranklin
Rooseveltsignedthe
SocialSecurityActintolaw
onAugust14,1935,aspart
oftheNewDeal.
Asaresultoflongerlife
spans,thoseborninthe
1970sand1980scanexpect
toreceivemoreinbenefits
thanthoseborninthe1940s
and1950srelativetowhat
theypaidintotheprogram.
WILL THERE BE ENOUGH TO GO AROUND?
1
Medicare, Medicaid, Children’s
Health insurance Program, and
spending to subsidize health insurance,
including costs associated with the
Affordable Care Act (ACA)
2
CBO's 2015 Long-Term Projections
for Social Security Report,
December 2015
3
As of May 2016—Social Security
Monthly Snapshot
InvestmentandInsuranceProducts: NOTFDICInsured NOBankGuarantee MAYLoseValue
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Paying America’s Bills | Exploring Entitlement and Demographic Trends | Page 1 of 3

2. Demographic Challenges: We’re Not Alone
While the U.S. faces demographic problems as the population
ages, much of the developed world is in far worse shape.
Falling birth rates in the developed world are leaving many
countries with too few workers to support older citizens. The
U.S. birthrate reached a peak in the late 1950s at 3.3 births per
woman as the baby boom generation emerged. Today, the rate
has dropped to 1.9 births per woman, below the 2.1 level
necessary to replace the current population.
As the population ages, a greater burden will be placed on the
government budget and resources—resources which may have
otherwise supported economic growth—and will be needed to
support increased costs for social programs. Interestingly, high
debt levels and difficult demographic issues have not yet led to
creditor concern. In fact, interest rates across the globe are near
their lowest levels on record.
While the U.S. is in better shape than many other developed
countries, the reality is we need working, tax-paying citizens to
take care of our aging population, and we would be wise to begin
facing our demographic issues before the situation becomes too
dire to address gradually.
THE U.S. AND JAPAN: COMPARISON OF POPULATION TRENDS
Although Japan is generally considered the“poster child”for nations facing demographic challenges, the United States is in a similar, but less dire, situation.
1960
BothcountriessawapostWorldWarII
babyboomthatbroughtaboutanincrease
intheworkingpopulation.
2016
Advancesinhealthcarehaveledtolonger
lifespans. Japan'sbirthratehasfallen
dramatically,forcingasmallernumberof
workerstosupporttheelderly.
2050
ProjectionssuggestthatJapanwillcontinue
toget“older”asapopulation.TheU.S.isprojected
toagemoreslowlyasimmigrationpolicies
andhigherbirthratesshouldprovideabetter
baseofyoungerworkers.
FEWER WORKERS AND MORE BENEFITS GOING TO OLDER PEOPLE
Data source: United Nations, Department of Economic and Social Affairs, Population Division (2015).World Population Prospects:The 2015 Revision, custom data acquired via website.
JapanUnited States
Percent of total population
Average Age
15% 10% 5% 0% 5% 10% 15% 15% 10% 5% 0% 5% 10% 15% 15% 10% 5% 0% 5% 10% 15%
0-4
10-14
20-24
30-34
40-44
50-54
60-64
70-74
80-84
90-94
100+
USA
USA
USA
Japan
Japan
Japan
31
29
39
46
42
50
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Paying America’s Bills | Exploring Entitlement and Demographic Trends | Page 2 of 3

3. Brian Rehling, CFA
Co-Head of Global Fixed Income Strategy
Brian Rehling is the co-head of global fixed-income strategy for Wells Fargo Investment Institute. In his role,
Mr. Rehling focuses on global fixed-income asset allocation, strategy guidance, and the interest rate outlook.
He maintains a strong connection to Wells Fargo Advisors, Wells Fargo Private Bank, and Abbot Downing
advisors through in-depth bond market publications and speaking engagements for a wide range of retail
and institutional clients. Mr. Rehling is frequently quoted in national media outlets, including The Wall
Street Journal, The New York Times, Barron’s, Bloomberg Television, Fox Business Network, CNBC, CNN
Money, and MarketWatch.
Mr. Rehling has extensive investment strategy experience and has spent more than 16 years in leadership roles at Wells Fargo
Advisors and predecessor firm A.G. Edwards working with retail, high-net-worth, ultra-high-net-worth, and institutional clients.
He earned a Bachelor of Science in Business Administration with a focus in Finance from the University of Missouri and is a
CFA® charterholder. Mr. Rehling is based in St. Louis.
Global Investment Strategy (GIS) is a division ofWells Fargo Investment Institute, Inc. (WFII).WFII is a registered investment adviser and wholly-owned subsidiary ofWells Fargo & Company and provides investment advice to
Wells Fargo Bank, N.A.,Wells Fargo Advisors, and otherWells Fargo affiliates.Wells Fargo Bank, N.A. is a bank affiliate ofWells Fargo & Company.
The information in this report was prepared by Global Investment Strategy. Opinions represent GIS’opinion as of the date of this report and are for general information purposes only and are not intended to predict or guarantee
the future performance of any individual security, market sector, or the markets generally. GIS does not undertake to advise you of any change in its opinions or the information contained in this report.Wells Fargo & Company
affiliates may issue reports or have opinions that are inconsistent with, and reach different conclusions from, this report.
This report is not intended to be a client-specific suitability analysis or recommendation, an offer to participate in any investment, or a recommendation to buy, hold or sell securities. Do not use this report as the sole basis for
investment decisions. Do not select an asset class or investment product based on performance alone. Consider all relevant information, including your existing portfolio, investment objectives, risk tolerance, liquidity needs, and
investment time horizon.
Wells Fargo Advisors is registered with the U.S. Securities Exchange Commission and the Financial Industry Regulatory Authority, but is not licensed or registered with any financial services regulatory authority outside of the
U.S. Non-U.S. residents who maintain U.S.-based financial services account(s) withWells Fargo Advisors may not be afforded certain protections conferred by legislation and regulations in their country of residence in respect of
any investments, investment transactions, or communications made withWells Fargo Advisors.
Abbot Downing provides products and services throughWells Fargo Bank, N.A. and its various affiliates and subsidiaries.
Wells Fargo Private Bank provides products and services throughWells Fargo Bank, N.A. and its various affiliates and subsidiaries. Wells Fargo Bank, N.A. is a banking affiliate ofWells Fargo & Company.
Wells Fargo Advisors is the trade name used by two separate registered broker-dealers:Wells Fargo Advisors, LLC andWells Fargo Advisors Financial Network, LLC, Members SIPC, non-bank affiliates ofWells Fargo & Company.
© 2016Wells Fargo Investment Institute. All rights reserved. 0716-01164 [99372-v1] e7998
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