When Social Security recipients can expect benefit cuts, according to latest projections
Some 70 million Americans receive Social Security benefits. How long those benefits will remain available – and at what level – is a continual concern.
Social Security is funded by payroll taxes known as the Federal Insurance Contribution Act, or FICA, that’s paid by workers and employers. The FICA tax contributes to the Social Security Trust Fund which covers Social Security Retirement, Survivors and Disability benefits.
Latest projections on how long Social Security will last
Officials have long sounded the warning that Social Security could be facing a major financial shortfall exacerbated by falling payroll taxes and a growing number of retirees. The latest Social Security and Medicare Trustees Report shows just when that could happen.
Last year’s report showed the program’s trust funds would be depleted in 2034, financial website Motley Fool reported. This year’s report pushed that back a year, meaning seniors wouldn’t have to worry about cuts until a year later in 2034, the extra time that comes from higher payroll tax income and lower-than-projected expenses last year.
Once its funds are depleted, Social Security would be in the position to pay 83% of scheduled benefits, a higher percentage than indicated in previous years.
Officials want Congress to act now
Social Security officials urged Congress to act now to shore up the funds.
“So long as Americans across our country continue to work, Social Security can — and will — continue to pay benefits,” Martin O’Malley, Commissioner of Social Security, said in a statement. “Congress can and should take action to extend the financial health of the Trust Fund into the foreseeable future, just as it did in the past on a bipartisan basis.
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“Eliminating the shortfall will bring peace of mind to Social Security’s 70 million-plus beneficiaries, the 180 million workers and their families who contribute to Social Security, and the entire nation,” he said.
The average Social Security recipient currently receives $1,907 per month.