Based on an estimation of Social Security’s trust fund, it is expected that retiree benefits may be cut to $17K a year in the future. It is possible for this event to occur as soon as 2033.
Retiree Benefits May be Cut to 17k a Year in 2033 if Social Security Isn’t Saved
According to an article from Yahoo Finance, retiree benefits may be cut to 17k a year starting in 2033, when the retirement program’s leading trust fund is projected to deplete. According to the Committee for a Responsible Federal Budget (CRFB), the estimated reduction in benefits may impact newly retired dual-income couples. In contrast, single-earner couples may experience a cut of $13,100 per year.
As stated by CRFB, a typical couple may face a substantial reduction in their Social Security benefits in 2033, amounting to a loss of exactly $17,400 per year.
According to Fiscal Times, if lawmakers do not take action to support the trust funds of the Social Security system before the estimated year of depletion, there will be a reduction of 23% in benefits across the board. Once the trust fund runs out, payouts will be limited to payroll taxes, covering only 77% of obligations. The impact varies by income, with high-income couples losing up to $23,000 and low-income couples losing up to $10,600.
Thus, these projected cuts in benefits may significantly impact retirees’ financial stability, making it essential to plan accordingly.