More than 70 million Americans rely on Social Security benefits. If there were cuts, millions of seniors and disability recipients could suffer the consequences. So, what is the good news?
The Social Security Administration could cut benefits one year later than the previous prediction. In the previous year’s report, SSA claimed that they could run out of funds by 2034. However, they have announced that they have enough money till 2035 instead.
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HOW MUCH COULD SOCIAL SECURITY CUT BENEFITS?
The Administration said that benefits could get a 25.2% reduction in 2034. So, all beneficiaries could get lower payments if this prediction became real in 2035. For example, if you get an average payment worth $1,913 in 2024, a 25% less would be about $478.
So, if you earned 1913 in 2035, your benefits would be $1,435 if there were a cut. This is a great deal of money if you rely on Social Security retirement or disability benefits. That is why it is so important that this cut has been delayed by at least one year.
For your information, there is a growing number of Americans who rely on Social Security retirement or disability benefits to avoid poverty and financial hardship. But why have things improved for retirees and SSDI recipients?
REASONS FOR SOCIAL SECURITY’S FUNDS IMPROVEMENT
Undoubtedly, one of the most important reasons why Social Security can delay cuts is because of the low unemployment rates in the United States in 2024. Added to that, the USA has a much stronger economy in 2024.
Wages have also increased. Therefore, the higher your salary is, the higher your payroll taxes to the Administration. Another good thing to take into account is the fact that Congress has not done anything yet to overcome this issue.
Therefore, there is also more room for improvement when the government takes action. Hopefully, the level of labor productivity will keep improving and the disability incident rate will continue to decrease. In this way, Social Security will have even better projections.