Social Security has become a growing concern for many Americans as the program faces potential cuts in the coming years. A recent Newsweek study reveals that 50% of Americans are very concerned about the future of Social Security retirement benefits, while another 40% are “fairly” or “slightly” concerned. The Social Security Administration’s Old-Age, Survivors, and Disability Insurance (OASDI) program trust funds are dwindling, and the SSA’s Office of the Inspector General warns that benefits could be cut by 21% by 2034 if no solution is found soon.
The Committee for a Responsible Federal Budget (CRFB) estimates that a retired couple with a “medium income” retiring in 2033 may lose up to $16,500 in Social Security benefits, while a single individual with a medium income could lose about $12,400. Despite the looming crisis, neither Vice President Kamala Harris nor former President Donald Trump has prioritized Social Security in their campaigns or provided clear plans to address the impending funding shortfall. Polls from October indicate that 44% of voters trust Democrats more to protect Social Security, compared to 34% for Republicans.
Stephen Kates, a senior financial analyst for RetireGuide.com, expressed surprise that neither Trump nor Harris has taken a clear stance on the issue, considering the potential for reduced Social Security within the next decade if politicians remain inactive. The lack of clear plans from either major party leaves many Americans uncertain about their financial futures as retirement approaches. Seventy-three percent of non-retired Americans are concerned that Social Security may not pay their benefits if the retirement trust fund is depleted, according to a recent survey.
Financial advisors suggest waiting to claim benefits to secure the highest possible monthly payments.
Social Security future raises concerns
Retirees can claim Social Security as early as age 62, but this results in a permanent reduction in benefits.
Waiting until full retirement age—between 66 and 67—ensures 100% of earned benefits, and delaying until age 70 can lead to an 8% annual boost. George Gagliardi, a certified financial planner and founder of Coromandel Wealth Strategies, advises his clients to wait until 70 to claim benefits unless a critical situation necessitates earlier withdrawal. He believes that Washington lawmakers will likely address Social Security’s solvency issues before the trust funds run out.
More than half of non-retired US adults (53%) expect they will need to use Social Security to pay for necessary expenses. Among those aged 60 and older, 69% said they will be reliant on Social Security benefits, with 47% saying they expect to be “very reliant.”
The amount of Social Security one will receive depends on several factors, including average career earnings over 35 years and the age one starts collecting benefits. Under current law, someone who is 54 today with average “medium” career earnings might see Social Security replacing about 40.9% of their pre-retirement income if they retire at 67.
However, their benefits might be lower, replacing just 32.2%, if no changes are made to address the program’s projected revenue shortfall. As the future of Social Security remains uncertain, Americans are growing increasingly concerned about their retirement security. It is crucial for politicians to address this issue and provide clear plans to ensure the long-term stability of the program.
