Should our lawmakers reform Social Security?
Here’s the weird part: If the answer is “no” … the result is actually major cuts to Social Security benefits.
Here’s why: Many people think the tax dollars they put into Social Security are saved — and then paid back to them with interest when they retire.
But that’s not how it works. The money that’s taken out of your paycheck for Social Security goes right to today’s beneficiaries.
That creates a problem. It’s estimated that by 2033 Social Security won’t have enough money coming in to fully cover retirees.i
What happens if we get to that point?
Social Security payments will automatically be cut to match the amount of money coming into the system. If that happens, it’s estimated that all Social Security recipients, regardless of need, will see their benefits cut by 23%.ii
Here’s what that means: A typical single-income couple would lose around $13,100 a year.iii A typical retired couple with two incomes would lose $17,400 a year.iv
The cuts would be worst for low-income seniors, who would lose the biggest percentage of their income. That means poverty rates for seniors would increase.
So, while reforming Social Security may seem painful … it’ll be a lot more painful to *not* reform it.
WHAT YOU NEED TO KNOW:
- It’s estimated that Social Security will run out of money to pay full benefits to retirees by 2033.
- A typical dual-income couple would lose $17,400 a year if Social Security isn’t reformed before it runs out of money.
- Because benefit cuts would disproportionately affect low-income families, poverty rates for seniors will likely increase without Social Security reform.
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