Recently, there has been a lot of talk in the news about how Social Security is doing. Based on what experts have said, the Social Security fund will run out by 2037.
Millions of people across the country depend on the payments to make a living, and this has made them worried. However, this depletion could happen even sooner if the November 2024 elections go badly.
The current state of Social Security
Right now, it looks like the Social Security fund will run out of money by 2037. It is important to remember that the fund grows every year thanks to the money that taxpayers contribute.
This does not mean that Social Security will “disappear,” but it does mean that the fund will only be able to give 46% of what people are owed.
Unfortunately, this means that Congress is working hard to come up with a way to make the fund last longer so that the benefits can still be given at full rate.
At the moment, the fund only has two choices: either the amount of money that people pay into Social Security needs to go up, or the benefits that are being paid out need to go down.
It is thought by the Social Security Board of Trustees that a 13 percent cut in benefits right away, a rise in the combined payroll tax rate from 12.4% to 14.4% right away, or a mix of these two changes would be enough to pay all the benefits that are due for the next 75 years.
The reserve could be depleted as early as 2031
The fund could run out as early as 2031 if benefits are not cut. Some presidential candidates do not want to cut benefits because it could hurt voters who do not want to see their payments go down.
Some candidates also want to get rid of the taxes that are put on Social Security. It would cost $950 billion to run this, which would come out of the Social Security fund. It is also planned to stop taxing tips and overtime, which would take away another $900 billion.
With these changes, the fund would run out faster, and it would be empty by 2031 instead of 2037. If passed, other proposed tariffs and immigration plans would also take $400 billion out of the fund.
People who get Social Security would like the short-term benefit, but if these changes are made, Social Security will be much less available in the future.
Social Security is a lifeline for millions of Americans
Even though Social Security is supposed to be an extra source of income in retirement, most people who get it live off of their payments alone.
Through their programs, Social Security helps retired people, people with disabilities, and people who do not make much or any money.
Cutting back on income may seem like a bad thing, but if nothing is done now to make the fund last longer, it will always have a lower rate of return.
A lot of people running for president have called for big changes to the way Social Security works. President George W. Bush wanted to privatize Social Security while he was in office.
President Barack Obama also wanted to make changes to his presidency. One of these was to raise the Social Security payroll tax and lower benefits.
This plan was meant to fix the problem the fund is having right now, but it was not backed when it was first put forward in 2011.
As people live longer and older, Social Security faces big problems when it comes to making sure it will be able to pay its bills in the future. Congress will have to take big steps to keep the fund from running out completely.
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