Millions of retired Americans rely heavily on Social Security benefits as a source of income for their daily living expenses.
Social Security has had trouble keeping up with the population and serving the public, so many people are worried.
44% of Americans have stated that they do not think there will be funding left when it’s their turn to retire.
This is data from Northwestern Mutual’s 2022 Planning & Progress Study, according to The Motley Fool.
This isn’t entirely true.
What will happen with Social Security benefits in the future?
There could very easily be cuts in benefits in ten years if the issue is not straightened out.
The cuts could be up to 20%.
The issue at hand is how many people end up surviving entirely on benefits, even though it isn’t designed for that.
While a 20% cut is alarming, it’s better than no benefits at all.
Funding for Social Security comes from payroll taxes, which aren’t going to disappear.
As baby boomers leave the work force, the funding has started to dwindle.
What does this mean for those who retire in the future?
It’s important to keep in mind that benefits are designed to only cover 40% of previous wages.
If you plan accordingly, you can end up with a decent nest egg.
You will still very likely receive Social Security benefits, but the best course of action is to have other sources of income in retirement.