Social Security cuts scare me, but not for the reason you may think

Social Security cuts scare me, but not for the reason you may think

Social Security does not run the risk of going bankrupt and cutting benefits across the board. That’s the good news. The bad news, though, is that benefit cuts are a definite possibility once the program’s trust funds run out of money.

According to the most recent projections, this could happen in 2035. It can also happen a little sooner or later depending on several factors.

Either way, the point is that there will be cuts to Social Security. And that makes me really nervous – but for the reason you might suspect.

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I don’t count on Social Security – but many other people do

The idea of ​​Social Security cuts isn’t new or shocking to me. I’ve been reading about Social Security for years, and I’ve known for a long time that benefit cuts are a definite possibility.

I also know that, even without spending cuts, Social Security will not provide me with enough income to live comfortably if I don’t have a job. That’s why I don’t plan to rely heavily on it as a source of income to begin with.

For years I maximized my 401(k) and invested elsewhere in hopes of growing myself a significant nest egg. My goal is to rely on that money as my primary source of retirement income and use the income I get from Social Security as gravy — money I can spend on leisure, travel, or even charity, if I’m in a strong enough position. financial position to give some of it away.

As such, the reason the Social Security cuts scare me so much is that I know many people who: are not do what i do. Instead, they save minimally for retirement, if at all, and plan to fall back on Social Security as their primary source of income in the future.

That is dangerous without benefit discounts in the mix. But given the potential for austerity, I fear for my friends and relatives who will struggle immensely when their time in the job market comes to an end.

I’m also concerned about today’s seniors who get most of their income from Social Security. Many of those people missed the window to save, and since they’re already retired, they can’t go back in time and change the state of their nest eggs. If those people see their benefits cut by 20% (a strong possibility based on recent financial projections), it could plunge them into poverty and doom them to a world of stress at a time when they are most vulnerable.

Can Social Security Cuts Be Avoided?

Lawmakers have thrown in several solutions to avoid Social Security cuts, but each seems to have its downsides. Equally worrisome is the fact that we could only be about a decade away from benefits, but no real action has been taken to avert that situation so far.

As we get closer to the day of Social Security reckoning, lawmakers may be inspired to act. But the longer they wait, the more benefits cuts become a solid possibility. And while I’m doing my best to make sure that’s not a problem for me, I’m concerned about the many people who could find themselves in serious financial trouble if benefits are cut across the board.

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