The most important federal scheme in the United States is Social Security. Most older Americans receive Social Security payments, largely or completely covering their retirement income.
Almost all retirees receive guaranteed income, with Social Security being the most well-known of these income streams.
Social Security Benefits: You Should Wait Until 70 To Claim Maximum Benefits
Americans Receiving Social Security Benefits
According to SSA statistics, 97% of Americans 60 and over are getting or will get Social Security payments. According to a 2021 SSA analysis utilizing data from 2015, 37 percent of men and 42 percent of women who are elderly Social Security pensioners receive a minimum of 50% of their income through the program. Benefit claimants receive payments over an extended period because they live longer.
Additionally, 10,000 baby boomers retire each day. An imbalance exists because fewer workers contribute to the system (through payroll taxes) compared to more people receiving benefits.
The Old-Age & Survivors Insurance trust fund, which provides payments from Social Security for retirees, is therefore predicted to run out in 2033 without legislative action.
Social Security Payments To Be Reduced In Future
Benefits are still available even if the trust money is exhausted. Employees would still pay payroll taxes for Social Security, and retirees would still be eligible to receive that money. There would be reductions, though, and if the trust money runs out, only roughly 77% of the payments guaranteed would be paid.
To address the solvency issue, Congress will virtually certainly change Social Security. Reducing payments, postponing the FRA, increasing taxes on benefits, boosting the financial penalty for collecting Social Security before the FRA, or an assortment of these and other factors are all possible answers. However, Congress is unlikely to adopt measures detrimental to retired Americans or close to retirement.
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