For years there has been growing concern over the future of America’s Social Security program. A 2020 report from its Board of Trustees projected that if things do not change, the Social Security trust fund reserves could be depleted by 2035 – or sooner. This means the time will come when Social Security’s income will only be enough to cover about 75% of benefits. Go Banking Rates looked into the situation and found that longer life expectancies, a smaller working-age population, and the growing number of retirees are to blame. And it seems the problem is only becoming more pronounced. By 2035 there will be more than 20 million more retirees than there are today.
Shoring Up Social Security
Social Security is not in danger of going away as long as there is a working population and money is continuing to flow into the system. However, the time is coming when there will not be enough money in reserve to pay the full benefits retirees were expecting. That means benefit cuts will need to be made. That’s why something must be done – sooner rather than later!
Several ideas have been proposed on how to deal with the pending budget shortfall. The some ideas include raising the payroll tax rate, increasing the wages subject to Social Security, raising the full retirement age, reducing the annual cost-of-living adjustments, and cutting benefits. The Go Banking Rates article takes a deep dive into each suggestion, examining what would happen if it were enacted and how Social Security would look in 2035.
Legislation that Makes a Difference
This landmark bill will, if passed, increase benefits by about $65 each month for most retirees, adopt the Consumer Price Index for the Elderly (CPI-E) which offers a more realistic Cost-of-Living Adjustments (COLAs) for retirees, as well as guarantee the long-term solvency of the Social Security program.
It also lifts the wage cap on Social Security taxes. As things stand now, someone making $20 million a year pays the same amount of money into Social Security as someone earning a fraction of that income. The current wage cap is $142,800, and any income over that amount is not taxed. By raising – or completely lifting – the wage cap, more money would pour into Social Security, bolstering its reserves, and allowing benefits to be paid in full for longer.
Time is running out. We must speak up now and tell our representatives in Congress that something has to be done to shore up Social Security for today’s seniors and tomorrow’s. We cannot let funding fail this program that is the lifeblood for America’s retirees. You can show your support by signing The Seniors Trust petition.