If the U.S. defaults, what happens to Social Security? It's possible your check could be delayed, although the length of the interruption would depend on how long it takes lawmakers to fix the fiscal situation. Seniors and other recipients should monitor the negotiations over the
Government shutdowns don't hit payments for Social Security, Medicare, or Medicaid, since Congress places those programs in the mandatory category that's exempt from the annual government funding process and therefore predominantly exempt from funding lapses.
Social Security is considered a mandatory program, and it isn't funded by the shorter-term appropriations bills passed by Congress and signed by the president. That means its operations and funding don't stop when the government shuts down.
Under normal conditions, the Treasury sends Social Security payments one month in arrears. That means the check you receive in June covers your benefits for the month of May. If the debt ceiling isn't raised, the Social Security payments due to be sent to beneficiaries in June would most likely still go out.
In the proposals presented to the Commission, the use of retirement bonds--and annuities based on bond accumulations- would also replace the entire benefit structure of Social Security for the future.
While you may have heard at some point that Social Security is no longer taxable after 70 or some other age, this isn't the case. In reality, Social Security is taxed at any age if your income exceeds a certain level.
Social Security offers a monthly benefit check to many kinds of recipients. As of December 2023, the average check is $1,767.03, according to the Social Security Administration – but that amount can differ drastically depending on the type of recipient. In fact, retirees typically make more than the overall average.
As of 2021, the Trust Fund contained (or alternatively, was owed) $2.908 trillion. The Trust Fund is required by law to be invested in non-marketable securities issued and guaranteed by the "full faith and credit" of the federal government. These securities earn a market rate of interest.
Most of the $6.8 trillion of intragovernmental debt is held in government trust funds. About $2.7 trillion is held in the Social Security Old Age and Survivors Insurance (OASI) trust fund in the form of special issue securities that are expected to be redeemed within the next 15 years or so.
There's a roughly one-in-four chance that the US will hit the so-called X-date — at which the government runs out of cash — without a deal to raise the debt limit, and the odds are getting worse, according to JPMorgan Chase & Co.
Employees not required to work are “furloughed,” that is, placed in a non-pay, non- duty status, until the shut-down ends. Will “excepted” employees get paid? Employees designated “excepted” who continue to work during the shut-down will almost certainly be paid for this period.
Under the adult CDR standards, the SSA may take benefits away if: You demonstrate medical improvement per your doctor, which shows you can work. You are able to engage in a substantial gainful activity (earning more than $1,740/ month working).
Payments may be suspended because the recipient has excess earnings, excess unearned income, excess resources, or a change in living arrangements. For the purposes of this book, individuals who have had their SSI payments suspended for 12 months or longer are considered terminated from the SSI program.
Social Security and Social Security Disability Insurance (SSDI) can sometimes be garnished to pay money you owe to the government, such as back taxes or federal student loans, and money you owe for child or spousal support.
Retirees, Veterans, and Survivors
Although there are no proposed cuts to retirement compensation, payments to retirees of the uniformed services are paid out of the Military Retirement Trust Fund. Default could result in payment disruptions for retirement and Dependency and Indemnity Compensation (DIC).
1/19/24 Update: President Joe Biden signed into law a short-term funding extension on Friday, the White House announced, averting a partial government shutdown. The short-term funding extension sets up two new funding deadlines on March 1 and March 8.
Bottom line. Current workers will still receive Social Security benefits after the trust fund's reserves become depleted in 2034, but it's possible that future retirees will only receive 78% of their full benefits unless Congress acts.
Bush 'borrowed' $1.37 trillion of Social Security surplus revenue to pay for his tax cuts for the rich and his war in Iraq and never paid it back”.
The Social Security Act was signed into law by President Roosevelt on August 14, 1935. In addition to several provisions for general welfare, the new Act created a social insurance program designed to pay retired workers age 65 or older a continuing income after retirement.
The Government Has Borrowed $1.7 Trillion From The Social Security Trust Fund. The government has borrowed the total value of the Trust Fund to pay for other government spending. Beginning in 2017, the government will have to begin backing up these paper promises with real money.
We use your taxes to pay people who are getting benefits right now. Any unused money goes to the Social Security trust funds, not a personal account with your name on it. Many people think of Social Security as just a retirement program.
The idea of Congress stealing from Social Security and not paying interest is a complete myth. There are, however, tangible reasons for Social Security's struggles, many of which can be tied to long-running demographic shifts.
The maximum benefit depends on the age you retire. For example, if you retire at full retirement age in 2024, your maximum benefit would be $3,822. However, if you retire at age 62 in 2024, your maximum benefit would be $2,710. If you retire at age 70 in 2024, your maximum benefit would be $4,873.
A plurality of older Americans, 40.2 percent, only receive income from Social Security in retirement. Roughly equal numbers of older Americans receive income from defined benefit pensions as from defined contribution plans.
Washington
One of the highest-paying states for Social Security is Washington. The average social security check that a retired individual receives in this state is $1,868.79 per month. There is no income tax in the state, which means that all sorts of retirement income are exempt from taxes at the state level.