The vast majority of U.S. citizens are concerned about their future social security receipts, with such anxieties popping up amid the projected depletion of social security funds over the next decade.
“More than half (53 percent) of Americans who haven’t retired yet say they expect to rely on Social Security benefits to pay their necessary expenses once they retire,” said a Nov. 21 survey from Bankrate.
“But at the same time, 72 percent of all Americans are concerned that promised Social Security benefits won’t be paid to them upon retirement age.”
Generation-wise, baby boomers and Gen X are most anxious, with more than 80 percent worried about the issue. Among millennials and Gen Z, this number was at 60 percent to 70 percent.
The social security system’s main trust fund is calculated to deplete by 2035, according to a May report from the Social Security Board of Trustees. When funds are depleted, the social security administration will only be able to pay beneficiaries 83 percent of the promised benefits.
Another September report from the Committee for a Responsible Federal Budget expects social security funds to deplete by 2033, following which beneficiaries would be forced to take a larger, 21 percent, reduction in monthly receipts.
For a typical single-income couple, this indicates an annual benefit reduction of $12,400, with dual income couples losing $16,500. And by 2098, the 21 percent reduction is projected to rise to 31 percent.
With millions of people relying on social security to pay for daily necessities, a more than one-fifth reduction in monthly receipts could be broadly devastating.
“There’s a vast divide between Americans’ concern about the looming Social Security funding shortfall and the lack of serious and thorough conversation among elected officials about what to do about it,” said Bankrate Senior Economic Analyst Mark Hamrick. “The result is that the American public’s financial well-being is not being tended to.”
To complicate matters, many Americans believe they are already behind on their retirement savings, he said. Hamrick advised Americans to undertake proactive steps to ensure their retirement plans.
Tackling Social Security Solvency Crisis
A recent study from the Employee Benefit Research Institute showed how critical social security payments are for retired Americans.
Among 80 percent of respondents said social security was an income source accounting for roughly half of their total earnings.
The majority of retirees have only three months’ worth of savings put aside for emergencies. As such, any reduction in income puts them in financial distress.
Facing a looming crisis in social security, lawmakers have proposed measures to tackle the issue, which vary depending on the political party. Last February, a group of Democrat lawmakers and Sen. Bernie Sanders (I-Vt.) introduced the Social Security Expansion Act.
The bill proposed requiring wealthy American households to “pay their fair share of taxes,” which it claimed could keep social security solvent for an additional 75 years. Specifically, it suggested imposing a 12.4 percent tax on business and investment income of wealthy people.
On the other hand, President-elect Donald Trump proposed during his campaign that he would cut down taxes for social security payments received by seniors.
In August, a group of lawmakers introduced the Protecting and Preserving Social Security Act aimed at strengthening the financial state of social security and ensuring that “seniors continue to benefit from the programs they have paid into throughout their lives,” said an Aug. 2 statement.
The bill proposes doing away with the generic measure of inflation to decide annual cost-of-living adjustments to social security payments. Instead, it wants to use an inflation gauge that specifically measures the living costs incurred by senior citizens. The Act also seeks to phase out limits on social security contributions.
“Social Security provides crucial support to millions of kupuna [elders], people with disabilities, and other vulnerable communities in Hawaii and across the country,” said Sen. Mazie Hirono (D-Hawaii).
“By lifting the cap on Social Security contributions, the Protecting and Preserving Social Security Act will help ensure Social Security remains solvent for decades to come.”
From The Epoch Times