Social Security Benefits Could Be Cut by 24.9% in 2034-2035
Social Security is a program that helps retired and disabled people pay for their living expenses.
However, it faces an undetermined future, and experts predict that the program’s cash reserves will be fully depleted by 2034-2035, according to GoBanking Rates.
This could mean that Social Security benefits would be cut by 24.9%, which would significantly impact retirees who rely on the program for their income. Another published article also says that the Social Security trust fund could possibly be depleted by 2032.
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Social Security Problems and Possible Solutions
The problem with Social Security is that the number of Americans aged 65 and older is expected to increase, while the working-age population is declining. This means that fewer people will be paying into the system, while more people will be taking money out of it.
To solve this problem, there are several proposals that have been suggested.
One proposal is to raise the payroll tax rate, which is currently set at 6.2% for workers and 6.2% for employers. If nothing is done by 2034-35, the payroll tax would need to increase significantly to sustain the program.
Another proposal is to increase the wages subject to Social Security taxes, which would affect high-income earners.
Other options to balance the Social Security budget include raising the full retirement age, reducing the annual cost-of-living adjustments, and cutting benefits. However, experts believe that cutting benefits is unlikely, given the program’s popularity.
In conclusion, the future of Social Security is uncertain, and it is essential to plan for the worst-case scenario. Retirees should consider saving more money for their retirement and finding ways to stretch their money to cover their living expenses. Ultimately, it is up to Congress to find a solution to the Social Security funding gap and ensure that the program continues to provide benefits to those who need them.
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