As a Social Security beneficiary, you may have concerns about the future of your benefits. And rightly so. The Social Security trust fund is depleting rapidly, and Congress needs to take action soon; otherwise, your benefits could be reduced by $300 or even more.
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What’s going on with Social Security?
For years, Social Security has paid out more in benefits than what it garners from payroll taxes. And it’s not merely due to an aging populace either. Income inequality is another reason behind this. The richest Americans do not pay Social Security taxes on their total earnings, which means money that should be used by the program is being missed.
Time is running out
Recently, Stephen Goss, who is the chief actuary of the Social Security Administration, cautioned Congress that in another 10–11 years, the fund will be empty. In such a case, people receiving benefits will have to deal with an inevitable reduction in their payments. 86–87% of individuals needing social security to survive are affected by this fact.
So, what can you do?
While the future of Social Security is uncertain, there are things you can do to protect yourself. Consider alternative investments like annuities or Treasury bonds. Annuities provide a steady income stream and can protect against the risk of running out of money in retirement. Treasury bonds offer a consistent return profile with minimal risk.
Do Not Sit Still Until Time Runs Out
Being ahead of time is vital, don’t wait for announced reductions on Social Security checks. Now is the time to determine a plan for your financial future. Consult with a financial adviser on this matter.
Conclusion
SSA is one of the many important programs whose sustenance depends on poor Americans. But it is in dire straits now. Otherwise, a big slash in benefits will be faced by them if Congress does not work soon. It is high time we talked straightforwardly about Social Security’s destiny. There is no silver bullet that exists but you can shield yourself from these impending cuts through prior planning and preparation.
FAQs
What’s happening to Social Security checks?
Potential cuts due to trust fund depletion.
When could the trust fund run out?
What’s causing the problem?
Declining birth rates, an aging population, and income inequality.
What’s the solution?
Raising taxes and/or cutting benefits.
What’s the impact on retirees?
Potential financial hardship.
