The previous report from the Board of Trustees was not pleasant at all, especially for those who need Social Security to get by. It informed Americans that the Social Security Administration could not have enough money to pay 100% of their benefits by 2034.
In May, 2024, the Social Security Administration has announced that the situation has changed. Besides, SSA has pushed off for one more year these benefit cuts. Bear in mind that some retirees live on a shoestring budget and cannot afford any reductions.
SOCIAL SECURITY CUTS EXPECTED FOR 2035, INSTEAD OF 2034
Even if it may still sound negative, it is a great improvement. As a matter of fact, there are several reasons for this changes regarding future cuts in 2035. One of the keys to the delay in benefit cuts is the fact that the U.S. economy has become stronger.
What is more, there are very low unemployment rates so there are many more people paying payroll taxes every month. Getting more funding is essential to be able to pay Social Security retirement, SSDI, survivors and spousal benefits.
Some Americans still do not know that the money they pay to Social Security is to pay other retiree’s benefits. When they retire, other workers will do the same for them. So, your money is not saved for you to receive it in the future.
HOW MUCH WOULD SOCIAL SECURITY BENEFITS BE REDUCED IN 2035?
Although this is just a prediction, it could be a cut of about 17%. For your information, the previous cut was supposed to be about 25% in 2034. Hence, there is a lot of improvement. Not only have reductions been decreased, but SSA also expects it to be a year later than predicted.
Another important figure SSA has revealed is that about 50% of seniors need retirement benefits to be able to live with dignity. Otherwise, they would have to face food insecurity or even poverty in some cases.
Wage growth is also to blame for the improvement of the Social Security predictions. The higher your wage is, the more taxes you pay to Social Security. Remember that those who earn the taxable maximum for 35 years and file at 70 can get $4,873 from SSA.
