The financial challenges of our nation’s retirement fund have been a topic of conversation for a long time. Every year we read similar headlines and wonder will congress save social security? As it stands now the social security trust fund will be depleted by 2034. One year earlier than expected. Yet congress has the power to change that. There are politicians who want to “coax” retirees back to the workplace. The Republican Study Committee proposed raising the retirement age to 69 while making $1.5 trillion in cuts to social security over the next 10 years.
There are two issues with the current proposals. Not everyone can work later in life. Many people are forced to retire early due to illness or injury. And reduced benefits will greatly impact low-income individuals currently living check to check. As a wealth management firm, we educate clients on the need for other sources of income in retirement. You can’t rely on social security alone. But proper planning and preparation is necessary if you want to live well after retirement.
Not every retiree planned appropriately and will not be able to manage without their social security benefits. The good news is that social security won’t go away entirely in 2034, but benefits may be cut by as much as 19%. This means that if your monthly benefit is $2000, in 2034 it will be reduced to $1620. You will have less money to live on when things cost much more. It’s certainly not ideal. Especially when you consider that Medicare Part A is in financial trouble as well and will only be able to cover 89% of total scheduled Part A benefits by 2034.
Will congress save social security? They will be very unpopular if they don’t figure out a way to protect our hard-earned money. And we all know that politicians want to be liked.
Will Congress Save Social Security
