Social Security beneficiaries will see a reduction in their payment if the program runs out of funding as expected.
Officials now think that it will run out of funding earlier, in 2034.
How far will my benefits be reduced?
The funding for Social Security payments is estimated to run out by 2034. This is because the Social Security Administration doesn’t collect enough taxes to cover what it pays out to claimants.
The agency started using more money than they received about ten years ago when the baby-boom generation began to retire.
Since many Americans lost their jobs during the pandemic, they weren’t paying into Social Security. Others have retired early and started claiming benefits earlier too.
If you have already retired or plan to in the near future– you will be impacted by the benefit reduction. However, that may change id reforms are made. For example, a tax hike could allow the trust fund to build up a cash reserve again. If the funds are depleted, there will only be enough to pay beneficiaries 76% of their current benefit.
Currently, the maximum benefit is $3,895, but his could drop to $2,960.20 in the near future. Charles Blahous served as a public trustee for Social Security and Medicare, and he has figures that could help save the program. Based on his calculations, a 21% benefit reduction for everyone, including current claimants would be an immediate fix. However, if it was limited to future claims starting next year instead, it would cut benefits by 25%.