As Social Security celebrates its 89th birthday, there’s growing concern about its future. According to the latest report, the reserves that fund benefits for 70 million Americans could be depleted by 2035. If that happens, benefits might be cut by 17% and that has many retirees worried about their financial security.
Should You Take Social Security Early?
According to a Rodney Brooks article on SeniorPlanet.org, many people are choosing to start their Social Security benefits as early as 62, fearing the money won’t be there later. Remember that taking benefits early permanently reduces them by about 30%. For those who wait until full retirement age (66 or 67, depending on when you were born), or even until 70, benefits can increase significantly.
Unfortunately, the fear of losing out is driving some to claim early, even when it’s not in their best interest. If you’re in good health and you can afford to wait, delaying benefits could lead to a higher monthly check for the rest of your life.
What’s Congress Doing About It?
So far, Congress has not taken decisive action to address Social Security’s looming shortfall. Some proposed solutions include:
- Raising the income cap on Social Security taxes, which currently applies to income up to $168,600.
- Increasing the retirement age beyond the current 66 to 67 years.
- Means testing benefits, reducing them for individuals with higher incomes or assets.
So far, there hasn’t been action on these proposals which means the future of Social Security is uncertain.
What Can You Do?
Stay informed. Educate yourself about your benefits and plan accordingly. Read the Social Security Trustees Report, visit the Social Security Administration (SSA) website, and consider speaking with a financial professional to determine the best time for you to file for benefits.
As it stands, most Americans still take Social Security before reaching full retirement age. However, with the potential for future benefit cuts, it’s essential to plan carefully. If you’re under 50, it might be wise to consider other sources of retirement income, as the future of Social Security remains unclear.
You must be logged in to post a comment.