Social Security is increasingly in the news for concerns about its sustainability and financial impact. Perhaps the biggest uncertainty surrounding Social Security is its long-term financial viability. If funds run dry, future generations could be left without the safety net they've come to expect and rely on.
Current taxes and any accumulated surplus fund everyone's benefits. Payroll tax contributions are not reserved for future payouts to the particular taxpayer. Fewer workers are left to contribute toward the benefits of each retiree as Baby Boomers retire and the U.S. population ages.
One of the key drivers of that mismatch between revenues and expenditures is the nation's aging population and the corresponding decline in the ratio of workers to Social Security beneficiaries.
When will Social Security run out? According to the May 2024 Social Security trustees report, the fund reserves that help pay for Social Security benefits will be depleted in 2035. Without congressional intervention, retirees would then only be able to receive 83% of their full benefits.
If your spouse dies, do you get both Social Security benefits? You cannot claim your deceased spouse's benefits in addition to your own retirement benefits. Social Security only will pay one—survivor or retirement. If you qualify for both survivor and retirement benefits, you will receive whichever amount is higher.
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.
More than three-quarters of current retirees are reliant on Social Security to pay necessary expenses, Bankrate found. A scary deadline is looming for a lot of Americans: The Social Security trust fund is projected to be exhausted in 2033.
Ninety-five percent of never-beneficiaries are individuals whose earnings histories are insufficient to qualify for benefits. Late-arriving immigrants and infrequent workers comprise the vast majority of these insufficient earners.
Surviving spouse, at full retirement age or older, generally gets 100% of the worker's basic benefit amount. Surviving spouse, age 60 or older, but under full retirement age, gets between 71% and 99% of the worker's basic benefit amount.
The only people who can legally collect benefits without paying into Social Security are family members of workers who have done so. Nonworking spouses, ex-spouses, offspring or parents may be eligible for spousal, survivor or children's benefits based on the qualifying worker's earnings record.
Reduced Benefits
If no changes are made before the fund runs out, the most likely result will be a reduction in the benefits that are paid out. If the only funds available to Social Security in 2033 are the current wage taxes being paid in, the administration would still be able to pay around 75% of promised benefits.
A wife with no work record or low benefit entitlement on her own work record is eligible for between one-third and one-half of her spouse's Social Security benefit.
Starting in 2025, tax Social Security benefits in a manner similar to private pension income.
But the program is falling out of balance as growth in the workforce slows and more boomers collect benefits. By 2033, only 2.4 workers are projected to contribute to Social Security per beneficiary, down from 3.4 in 2000.
According to the Social Security Administration, or SSA, the monthly retirement benefit for Social Security recipients is currently $1,783.55 in 2024 on average. Several factors can drag that average up or down, but you have the most control over the biggest variable of all — the age that you decide to cash in.
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”.
On December 20, 2024, the Senate voted to pass the bill 76-20. This bipartisan legislation would eliminate the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). Together, these provisions negatively impact or eliminate Social Security benefits for millions of retired public servants.
To qualify to get $144 added back to your Social Security check, you can enroll in a Medicare Advantage plan that offers a Part B premium reduction or giveback benefit.
Policymakers could reduce program costs by changing eligibility and benefit amounts. These changes could reduce current or future benefit amounts for everyone or for certain groups. Improving finances by increasing program revenues. Benefits are largely financed through Social Security payroll tax revenues.
Have you heard about the Social Security $16,728 yearly bonus? There's really no “bonus” that retirees can collect. The Social Security Administration (SSA) uses a specific formula based on your lifetime earnings to determine your benefit amount.
Resource limits could also impact your Social Security
If you exceed that limit, you need to spend down your resources to be eligible. According to a recent study by the Center on Budget and Policy Priorities, 70,000 beneficiaries on average lose their benefits each year because they exceed the limit.
The Social Security 5-year rule refers specifically to disability benefits. It requires that you must have worked five out of the last ten years immediately before your disability onset to qualify for Social Security Disability Insurance (SSDI).