Although getting a benefits cut is not good news at all, there is something good about the latest news given by Social Security. Apparently, the Administration may not have enough money to pay 100% of benefits by 2035.
The good news is that it is a year later than Social Security expected. Bear in mind that in the previous OASDI Trustees Report, it was forecast for 2034. Even if there has only been a delay of one year, it shows that there could be a change in the negative prospects.
WHY HAS SOCIAL SECURITY IMPROVED THE FORECAST?
As a matter of fact, there are several reasons why the situation for the Administration’s funds seems to be improving. One of them is that the economy in the United States is becoming stronger.
A strong economy is giving more money to pay Social Security taxes. What is more, there is alow unemployment rate. As there are more people working, they make more payroll contributions to the Administration’s funds.
Besides, there has also been a wage growth and higher jobs. All these reasons allow the Social Security funds to improve little by little. This can give some hope to more than 70 million recipients in the United States.
WHY IS SOCIAL SECURITY BRINGING GOOD NEWS?
Because the previous report provided by the Board of Trustees claimed that reserves could “become depleted in 2034, a year earlier than projected in 2022”. Apart from this negative outlook, if the OASI Trust Fund reserves are considered separately, they would have been depleted by 2033.
Having enough money to pay retirees and disability recipients one more year is fantastic news. Bear in mind that about half of the retirees rely on Social Security benefits to make ends meet and live comfortably.
That is why is som important that workers make sure that they pay the right amount of payroll taxes to the Social Security Administration. In you find out that your employer is not paying the right amount, you can report it. Sometimes there are mistakes so check your annual statement to make sure everything is fine.