In the past few months, millions of retirees have been worried about the future of their Social Security benefits and the US retirement system as a whole.
This is because if nothing is done to stop the national trust funds from running out, monthly benefits will probably go down.
It is important to note that last year was the year when Americans’ hopes of having enough money to live comfortably in retirement fell the most since the global financial crisis.
Recent studies show that both working people and retired people’s confidence has not grown.
But there are some good signs, like the fact that pay growth is now higher than inflation, according to data from Greenwald Research and the Employees Benefit Research Institute.
The US retirement system may change as we know it soon
The top two things that the more than 2,500 Americans surveyed thought were most likely to go wrong were the rising cost of living, which makes it harder to save, and big changes to the U.S. government’s retirement system.
The second worry comes at a time when both retirees and workers expect to get money from three sources in their golden years: Social Security, employer plans, and personal savings or investments for retirement, the study found.
However, 91% of retirees say they depend on these benefit checks, even though 88% of workers think the system will give them money when they retire.
It is possible that Social Security benefits will soon change because the program’s trust funds will run out within the next ten years.
If Congress does nothing, benefits will have to be cut by at least 20%. It is also expected that Medicare’s trust fund, which pays for Part A hospital insurance, will run out of money a lot faster.
Craig Copeland, EBRI’s director of retirement research, said that changes to the tax breaks for individual retirement accounts or retirement savings through work could also make planning for retirement very difficult.
Craig Copeland, director of retirement research at EBRI, says that other things, like changes in the tax breaks for individual or employer-based retirement accounts or savings plans, could also make planning harder if they happen.
In the same way, Copeland thinks this could completely change what retirement is and how people plan for it.
At a news conference on Wednesday, Nancy LeaMond, executive vice president and chief advocacy and engagement officer for the American Association of Retired Persons (AARP), said that Social Security is always at the top of the list of priorities for AARP members.
LeaMond also says that because of this and how important Social Security is, they are asking every candidate for president this election where they stand on Social Security.
New results from the American Association of Retired Persons are less optimistic
A new poll from the American Association of Retired Persons (AARP) released this week shows that 20% of Americans aged 50 and up say they have no savings. This is not a good sign. Also, 61% are worried that they will not have enough money when they retire.
As LeaMond also said, the nonprofit group that speaks up for Americans aged 50 and up is also changing the way lawmakers think about family caregiving, which can make it hard for women to afford retirement.
Remember that the American Association of Retired Persons also backs a number of legislative efforts to make things safer, such as giving Americans who do not have access to employer-sponsored plans the chance to open savings accounts or automatic IRAs.
Congress just passed a bill to improve retirement security, but Copeland said that it might not have much of an effect on people who are getting close to retirement age.
These changes include ones that let savers in their 60s make extra “catch-up” contributions and ones that give low-income retired workers a match.
