What Happens If Social Security’s Trust Fund Really Runs Dry
The trust fund Social Security relies on to pay retirement benefits is dwindling and could be depleted by 2033. A CNBC report on MSN points out that at that time, Social Security will no longer be able to pay full retirement benefits. The general consensus is that millions of retirees could see a 21 percent across-the-board benefit cut if that happens.
New research from the American Enterprise Institute shows “the effects of that lost income could be enough to prompt a retirement crisis, since it would double the elderly poverty rate and reduce median senior household income by nearly 14 percent.”
One suggested solvency solution calls for reallocating benefits instead of across-the-board benefit cuts. This would avoid increases in poverty for low earners while having just a small effect on the middle class.
The Seniors Trust believes a better option is to enact The Social Security Expansion Act. It will give retirees an immediate benefits increase of about $200 a month, a fair annual cost-of-living adjustment (COLA), and increased minimum benefits. This bill will also ensure the long-term solvency of the Social Security program.
