“Social Security on the Brink: Will Your Benefits Be Slashed by 17% in 2035?”

Social Security isn’t shattered, but it’s shaky. The latest report on Social Security predicts that the combined retirement and disability trust fund reserves will go broke in 2035, putting many Americans on edge, especially those nearing retirement. The trustees report projects insolvency one year later than last year’s estimate, thanks to a strong economy and wage growth that have increased payroll tax payments funding the program.

While the potential depletion of the fund does not mean an empty till, it does translate to beneficiaries receiving only 83% of what’s been promised to them. Without a fix, beneficiaries could see a 17% cut in benefits. Congress is facing pressure to address the pending insolvency of Social Security to avoid automatic benefit cuts.

For many seniors, Social Security provides at least half of their income, and for some, it accounts for at least 90% of their income. Various solutions have been proposed to fix the shortfall, including increasing payroll taxes, raising the retirement age for younger workers, or lifting the cap on income subject to the Social Security tax.

Despite the uncertainty surrounding Social Security, financial planners are advising their clients to assume a reduced benefit and save more in their retirement accounts. They recommend delaying Social Security benefits until age 70 if possible to maximize monthly payments. However, not everyone has the luxury of delaying retirement due to physical limitations or job circumstances.

As concerns about the future of Social Security persist, it is essential for individuals to take ownership of their retirement planning by saving, investing, and not claiming benefits early. While the program may face challenges in the coming years, proactive financial planning can help mitigate the impact of potential benefit cuts. It is crucial for policymakers to address the looming insolvency of Social Security to ensure the program remains a vital source of income for millions of Americans in the years to come.