There are millions of Americans who rely on Social Security for financial well-being. There are many retirees and disabled workers who depend on Social Security checks for monthly expenses. However, recently the future of Social Security has been looking uncertain.
According to a new survey, many Americans believe that President Donald Trump will reduce benefits during his current even though, time and time again, he has promised not to. The results from the survey underline the concern that people about the future of Social Security.
Why People Are Worried
Within the government budget, Social Security has been one of the major expenses. Therefore, when the conversation is about reducing costs, many people assume that Social Security could be on the line.
The major reason that people have this fear is because of the decision to cut 7,000 jobs. The goal of this was to reduce costs and improve efficiency, but people think that it might make it more difficult to gain benefits.
Even though leaders often say they won’t touch Social Security, people have grown sceptical.
The Financial Strain on Social Security
Data shows that Social Security is under financial strain. The program is funded through payroll taxes from workers and employers. However, as people get older and more people retire, there is more money going out rather than coming in.
Predictions show that by 2033, the program will run out of funds, however, it is important to note that beneficiaries will not stop completely. Beneficiaries could face a cut of approximately 20%.
To address this, lawmakers might change benefit formulas, raise taxes, raise the retirement age, or a combination of these. However, none of those choices are widely accepted, which makes taking action more difficult.
What Cuts Could Look Like
If changes are made, they may not hit everyone in the same way. Here are a few possibilities experts say could happen:
– Smaller monthly checks: For the typical retiree, a 10% reduction may result in a monthly loss of around $170.
– Later retirement age: Younger employees may not be eligible for full benefits until they are 68 or even 70 years old.
– Reduced cost-of-living increases: It may be more difficult to keep up with growing expenses if checks do not increase as rapidly as inflation does.
For those who rely almost entirely on Social Security, even small changes could make day-to-day life more difficult.
Politics and Promises
There are certain law makers who note that cuts are necessary to decrease the country’s debt. Others say Social Security should never be touched, since so many depend on it.
The current administration has promised not to take away benefits directly, but there’s still talk of raising the retirement age or adjusting the way increases are calculated.
What You Can Do Now
A few steps to consider:
- Save outside of Social Security: Building up a retirement account like a 401(k) or IRA can give you extra security.
- Delay claiming benefits if you can: Waiting until age 70 to start collecting can significantly increase your monthly check.
- Make sure you budget well: It could be helpful to factor in the possibility that your Social Security benefit will be lower in the future.
- Stay updated: Be sure to keep updated with verified information relating to Social Security
Bottom Line
As it stands, Social Security benefits are still being paid in full. However, there are still many Americans who are concerned about the future of Social Security.
The most important thing that beneficiaries can do is stay informed and follow the Social Security website for information. This will also assist in making proactive decisions to safeguard your financial future.