Latest news with #Seniors
Yahoo
3 days ago
- Business
- Yahoo
The Social Security tsunami: Payments could be cut by 23%, doubling the poverty rate for America's seniors
As millions of Americans rely on Social Security for their monthly income, new reports indicate the program's finances are at a critical juncture. Here's what every current or soon-to-be recipient should understand about the future of Social Security, the risks to your benefits, and what steps Congress could take to keep the program strong. When will Social Security 'run out of money'? The latest 2025 Social Security Trustees Report finds the program's main reserve fund—the Old-Age and Survivors Insurance (OASI) Trust Fund—will be depleted in 2033. That's just eight years from now. At that point, unless Congress acts, the system will only have enough payroll tax revenue coming in to pay about 77% of scheduled benefits—triggering an automatic across-the-board cut of around 23% for all recipients. What does this mean for you? If you're already receiving or about to receive Social Security, a typical monthly benefit check of $2,000 could drop to about $1,540 if Congress does not address the funding shortfall. For a dual-earning couple, that could mean losing as much as $18,000 per year in benefits—potentially doubling the poverty rate among America's seniors. Why is this happening? For decades, Social Security collected more in taxes than it paid out, building up a trust fund that earned interest. But the math flipped in 2021: America's aging population means there are fewer workers paying into the system for each retiree drawing benefits. Recent tax changes and new laws have accelerated the shortfall, moving up the date of potential cuts. What needs to happen to prevent cuts? Congress needs to act within the next few years to prevent automatic benefit reductions. Lawmakers have several options—most likely, a combination of them will be required: Raise the payroll tax cap: In 2025, earnings over $176,100 are not taxed for Social Security. Proposals would have higher earners pay more by lifting or removing this cap. Increase the payroll tax rate: Even a gradual increase above the current 12.4% could address a significant chunk of the gap. Raise the full retirement age: The age for full benefits is already moving to 67 for those born in 1960 or later and will likely go higher for younger generations. Adjust the benefit formula: Lawmakers might change how initial benefits are calculated, perhaps favoring lower-income retirees with higher replacement rates while curbing benefits for high earners. Invest in the markets: A bipartisan Senate proposal seeks to fund a new sovereign wealth fund—essentially investing part of Social Security's reserves in stocks and bonds to seek higher returns, but this involves risk and is not a guaranteed fix. Direct federal funding: Some plans call for one-time or ongoing federal cash injections, though this would add to the national debt. What should recipients do now? Stay informed: Congress has a long history of fixing Social Security before benefit cuts occur—but there are no guarantees this time. Watch for updates: Changes to COLA (Cost-of-Living Adjustment), retirement age, and tax rates are possible, but none will affect checks overnight. Consider advocacy: Many organizations representing older Americans are urging Congress to act now to preserve benefits for current and future retirees. The Bottom Line: Social Security will not 'run out of money' entirely; it will always have payroll taxes coming in. However, if Congress does not shore up the trust fund by 2033, automatic benefit cuts of approximately 23% will occur under current law. Most experts and lawmakers believe a fix is likely, but recipients should watch closely. For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing. This story was originally featured on
CBS News
4 days ago
- Business
- CBS News
Annuities, reverse mortgages or Social Security: Which retirement tool works best for seniors?
Retirement looks different today than it did a generation ago. With today's longer life expectancies, rising living costs, sticky inflation and ongoing concerns about stock market volatility, many seniors are reevaluating how to structure their retirement plans. And that, in turn, is leading to some big questions about what tools seniors should use to ensure they can cover their expenses in retirement while also safeguarding their financial futures. For some, Social Security benefits offer a predictable monthly foundation, but that money is generally not enough to cover all retirement costs and keep pace with rising expenses. Others are turning to annuities for lifetime income or tapping their home equity with reverse mortgages. Each option has its own pros and cons, though, and choosing one over another isn't always straightforward. What works for one retiree may not suit another. So, how do you know which route is right for you? Here's what to know about each option — and how to determine which retirement tools fit best into your overall financial picture. Find out how to add an annuity to your retirement portfolio today. When it comes to choosing between annuities, reverse mortgages and Social Security benefits, there may not be a single "best" solution that works for every retiree. After all, everyone's financial capabilities and needs differ during retirement. However, there is likely a strategy that makes the most sense based on your assets, risk tolerance and needs. Let's break down who each may benefit most. Most retirees rely on Social Security to some degree. It's predictable, inflation-adjusted, and lasts for life. But with the average monthly benefit sitting at just under $2,000 in 2025, it's rarely enough on its own to cover the wide range of expenses that most retirees face. In other words, it's a good fit as a foundational income source, but it's also one that usually needs to be supplemented by savings or other tools. That said, if you time your Social Security benefits claim correctly, it can positively and significantly impact the size of your monthly check. Delaying your Social Security benefits until age 70, for example, boosts your payment by as much as 8% per year past full retirement age. Compare your annuity options to find the right fit now. If you're worried about outliving your savings or losing income in a downturn, annuities can offer peace of mind. These insurance products provide a guaranteed stream of income for a set period or even for life, essentially acting like a personal pension. There are numerous annuity types to choose from. Fixed annuities are particularly popular with risk-averse seniors since they provide predictable payouts. Variable annuities, while more complex, offer market exposure with some protection features. If you're going to buy in, though, you should keep in mind that annuity fees can be high, and access to funds is limited once you commit. But for those looking to fill gaps between Social Security and expenses, annuities can provide valuable stability. A reverse mortgage allows homeowners aged 62 and older to convert a portion of their home equity into tax-free cash without selling or moving, meaning that this option can offer critical financial relief to seniors when cash flow is tight. As a result, reverse mortgages tend to work best for house-rich, cash-poor seniors who have significant equity in their homes, plan to stay there long-term and don't mind reducing their estate's value. However, it's important to note that while reverse mortgages can be a good option for certain retirees, they also come with upfront costs and interest that accrues over time. And, because the loan must be repaid when the borrower moves or dies, this option is generally not ideal for those planning to move soon or who want to leave their home to heirs. Learn more about how a reverse mortgage could benefit you in retirement. The key to a solid retirement plan typically isn't choosing just one option. It's blending them in a way that meets your lifestyle and income needs. That's because annuities, reverse mortgages and Social Security each offer unique benefits, and combining them can create a more resilient financial strategy. It may help to think of Social Security as your baseline income, annuities as your safety net and a reverse mortgage as a potential backup if you need extra support later. The right mix for you will depend heavily on your assets, health, family situation and whether you want to leave an inheritance. Before deciding, you may want to consider speaking with a financial advisor who can walk you through your options in the context of your broader retirement goals. They can help you stress test different income streams and prepare for healthcare costs, inflation and other long-term considerations. There's no single "right" retirement income solution that will work for everyone, but there is a right strategy for you. Whether you lean on annuities, tap your home equity through a reverse mortgage or build around Social Security benefits, the best approach is often a balanced one. So, start by assessing your needs, risk tolerance and goals to try and determine how you can maximize your resources. With careful planning, you can create a retirement plan that offers both security and flexibility.
CBC
03-08-2025
- Climate
- CBC
Wildfire smoke causing hazy skies in Hamilton, Brantford and Niagara Region
Wildfire smoke is continuing to impact air quality in Hamilton, Brantford and the Niagara Region. Environment Canada issues a special air quality weather statement on Sunday afternoon that also includes the Haldimand, Norfolk and Brant counties. Hazy skies may continue into Monday, said the federal weather agency. It issued a similar advisory ealier in the week with the smoke originating from wildfires in the Prairies. "Air quality and visibility due to wildfire smoke can fluctuate over short distances and can vary considerably from hour to hour," said the statement Sunday. Smoke can cause eye, ear, nose and throat irritation, headaches or a mild cough, Environment Canada said. It can also cause chest pains and wheezing. The agency says seniors, pregnant people, kids and babies, people with health conditions and those who work outdoors should reduce activity outdoors and seek medical help if experiencing symptoms. It adds that when indoors, people should keep their windows closed as much as possible, but that during extreme heat, it's best to prioritize keeping cool.
Yahoo
01-08-2025
- Business
- Yahoo
Here are the top 5 states in America most impacted by Trump's new Social Security rule
Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below. If the Social Security Administration (SSA) moves all payments to electronic deposits, some older Americans may find themselves playing catch-up. In March, President Donald Trump signed an executive order directing the SSA to end paper check issuance by September 30 and instead use direct deposit, prepaid cards or other digital payment options. While it may seem inconsequential, the move impacts nearly half a million seniors nationwide. Don't miss Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 5 of the easiest ways you can catch up (and fast) Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan 'works every single time' to kill debt, get rich in America — and that 'anyone' can do it And although Senator Elizabeth Warren tried to assure Americans in a statement on July 23 that the SSA will keep paper checks, the uncertainty isn't exactly reassuring. Here are the top five states where seniors would be most exposed to this sudden change, if implemented. Where the end of paper checks will be felt most There isn't a state in the union that doesn't have someone who still receives their benefits through the Postal Service. However, some states would be expected to weather the change better than others. Most seniors who rely on a more traditional form of payment live in one of America's largest states or overseas territories. In U.S. territories such as Puerto Rico, approximately 8,378 individuals still receive their Social Security benefits through physical checks each month. Among the 50 states, California stands out with the highest number of residents still relying on paper checks — exactly 62,409 people. Texas is a distant second with 36,919 recipients, while New York ranks third with 32,867 individuals. Florida, often regarded as a top retirement destination for older Americans, has the fourth-highest number of seniors still receiving paper checks. Finally, Ohio rounds out the top 5 with 28,131 Americans still opting for paper payments. Many of these seniors could struggle to adapt to the Trump administration's proposed implementation of exclusively online transfers. Read more: BlackRock CEO Larry Fink has an important message for the next wave of American retirees — How to reduce your reliance on Social Security Whether or not the mandatory switch from paper to digital checks happens, it's important not to be caught off guard. The best way to ensure this is by not being reliant on Social Security in the first place. After all, if you wake up one morning and don't get your check in the mail, it may take time to set up online access. Invest what you can Even if you don't think you have much to invest, starting small is always better than never starting at all. With Acorns, you can set money aside every time you make a purchase with your credit or debit card. Acorns automatically rounds your purchases up to the nearest dollar, and the excess is placed in a smart investment portfolio for you. The $4.25 coffee to start your day? It's now a 75-cent investment in your future. When you sign up now and set up your first recurring investment of $5 or more, you can get a $20 bonus investment, too. Maximize your IRA Another way to decrease your reliance on Social Security is to increase your retirement savings with an individual retirement account (IRA). An IRA has tax advantages, helping you invest for the long term. Looking ahead is especially important during market volatility that could damage traditional retirement assets like stocks and bonds. With Priority Gold, you can invest for your retirement with a gold IRA, combining the tax benefits of an IRA with the inflation-hedging benefits of investing in gold. When you make a qualifying purchase with Priority Gold, you can also receive up to $10,000 in silver for free. If you're curious if this is the right investment for you, you can download their 2025 guide on investing in precious metals for free. Build your long-term wealth Beyond gold, you may also wish to invest in other physical assets to bolster your retirement fund. Home ownership is often considered the cornerstone for building your long-term wealth. But not everyone has the cash in hand for a down payment, or wants to commit to a mortgage. If you're on the fence about owning a home, you can still access the real estate market with platforms like Homeshares, which provides accredited investors access to the $34.9 trillion U.S. home equity market. Historically, this has been the exclusive playground of institutional investors. But now, with a minimum investment of $25,000, investors can gain direct exposure to hundreds of owner-occupied homes in top U.S. cities through Homeshares' U.S. Home Equity Fund — without the headaches of buying, owning or managing property. Homeshares offers risk-adjusted target returns ranging from 12% to 18%, and is an effective, hands-off way to invest in owner-occupied residential properties across regional markets. If investing in the home equity market doesn't appeal, you could instead look to the commercial sector. First National Realty Partners (FNRP) also allows accredited investors to diversify their portfolio through property, but focuses instead on grocery-anchored commercial properties. With a minimum investment of $50,000, investors can own a share of properties leased by national brands like Whole Foods, Kroger, and Walmart, without taking on the responsibilities of being a landlord. Simply answer a few questions — including how much you would like to invest — and start browsing their full list of available properties. What to read next Robert Kiyosaki warns of a 'Greater Depression' coming to the US — with millions of Americans going poor. But he says these 2 'easy-money' assets will bring in 'great wealth'. How to get in now Here are 5 simple ways to grow rich with real estate if you don't want to play landlord. And you can even start with as little as $10 Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead Here are 5 'must have' items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you? Stay in the know. Join 200,000+ readers and get the best of Moneywise sent straight to your inbox every week for free. This article provides information only and should not be construed as advice. It is provided without warranty of any kind. Sign in to access your portfolio
Forbes
30-07-2025
- Business
- Forbes
Social Security: Bankrupt, Insolvent Or Neither?
Over the years much has been written and communicated in the media that Social Security is going bankrupt or is insolvent and this is creating a lot of uneasiness among Seniors. At the outset, we need to understand that Social Security is not part of the government's general fund, Social Security is self-funded. So, when you hear all of the talk about debt and deficits, that refers to the general fund and has nothing to do with the Social Security trust fund. Let's define bankruptcy and insolvency. Bankruptcy is defined as a formal and legal declaration of the inability to settle debts. Insolvency is that state where an organization cannot pay debts on time because of lack of funds or bank balances. Based on the above, insolvency is a timing issue where bankruptcy is a finality. Below is a summary taken from the 2025 OASDI Trustees Report with projected operations of the Social Security trust fund through 2034. Think of the trust fund as a 'savings account' created by Social Security. The income going into the trust fund is made up of payroll taxes contributed by employees and matched by their employer. Payroll taxes represent 91% of the trust funds income. Income taxes on Social Security represent 6% of the income and interest earned by the trust fund represents 3% of the total income. As you can see from the chart, 2033 is when things change. In recent years, more benefits are being paid out than income coming in. The difference is made up by using the 'savings account.' In 2033 we will have used up all of the 'savings account'. The projected income in 2033 of $1,712 represents 78.2% of the projected benefits to be paid. How do we solve this problem? There are a number of options on the income side and the expense side to shore up the trust fund issued by the Office of the Chief Actuary at the Social Security Administration on September 25, 2024. This report is based on the 2024 Trustees Report. The report focuses on: Two of the bigger provisions that will help solve the problem and shore up the financial stability of the trust fund revolve around increasing the payroll tax rate from 12.4% to 16.0% or making all W-2 wages and self-employment income subject to the Social Security payroll tax which is now limited to $176,100. The report contains approximately 140 proposed provisions that would eliminate the shortfalls and let Social Security pay benefits based on the current formula being used. If none of these proposed provisions are enacted by Congress, then benefits are projected to be cut across the board anywhere ranging from 20% to 25%. As long as people continue to work, money will be going into the trust fund, and benefits will be coming out of the trust fund. The question is, how much? To sum up, Social Security is not going to go bankrupt unless everybody quits working. In 2033 Social Security will technically become insolvent because it will not be able to pay benefits at the rate they are paying now under the current method of calculating monthly benefits. If Congress does not make the necessary changes to pay benefits using the current formula, the insolvency will be cured by paying current benefits in the amount of income coming into the trust fund. Money in, money out! So, I would say Social Security is neither. It can't go bankrupt, and when it technically goes insolvent, it cures that by adjusting the payout to equal the income. Remember, take the wrong benefit at the wrong time, it's usually smaller and forever.
