Find Out How Potential Social Security Benefit Cuts Could Affect You
It’s a well-known fact that Social Security is facing a budget shortfall. There is concern that in the coming years the amount it pays out in benefits will far exceed how much money it collects in payroll taxes. According to Social Security Administration projections, its trust funds could become depleted by 2035 (possibly sooner due to the pandemic’s impact on the economy). At that time, it would only be able to pay about 79% of its promised benefits. That is obviously devastating news for the millions of American retirees who rely on their Social Security benefits each month.
CNBC discovered there is a new online tool that can help you estimate how potential benefit cuts could affect you. It reports that Covisum, a Social Security claiming software company, has developed a calculator to help individuals determine how any benefit cuts would impact their retirement income.
While this tool can certainly help seniors prepare for their financial future, the bottom line is that retirees worked hard and earned every penny of their Social Security benefits. We must act now to shore up the Social Security program to ensure it’s able to fully fund our retirees’ benefits – today and tomorrow.
The Social Security Expansion Act is the Solution
To secure Social Security’s long-term solvency, we must pass the Social Security Expansion Act. This landmark piece of legislation will accomplish this feat by lifting the cap on Social Security taxes. Its sponsors believe this alone could “extend the solvency of Social Security for about 52 years to the year 2071”.
That’s because you pay Social Security taxes based on your earnings, up to a certain amount (the wage cap). This year, that amount is $142,800. Any income over that amount is not taxed. Many people believe this is unfair and are calling on higher wage earners to pay their fair share. There’s actually a nickname for this movement. It’s called Scrap the Cap. Scraping the cap would bring in more revenue to fill the trust fund coffers and sustain the Social Security program.
The other key elements of the Social Security Expansion Act include increasing monthly benefits by about $65 on average, establishing a fairer Social Security cost-of-living adjustment (COLA) based on the unique spending habits of seniors – particularly the high costs of healthcare, and increasing minimum Social Security benefits in order to greatly reduce senior poverty.
The Seniors Trust has been working diligently to convince members of Congress to pass this legislation. You can show your support by signing their petition. You would not be alone. Surveys show unanimous support for Congress to finally enact the Social Security Expansion Act.
