Latest news with #SocialSecurityBoardofTrustees
CNBC
20 hours ago
- Business
- CNBC
Social Security retirement trust fund may be depleted in less than a decade, new trustees' report finds
The trust fund Social Security relies on to pay retirement benefits may be depleted in 2033, according to an annual report released by the Social Security Board of Trustees on Wednesday. That is unchanged from last year's projections. At that time, 77% of those benefits will be payable, according to the report. Social Security's combined trust funds — the Old-Age and Survivors Insurance and Disability Insurance trust funds — will have enough revenue to pay scheduled benefits and administrative costs until 2034, according to the report. That is one year earlier than projected last year. At that time, 81% of the combined benefits will be payable, according to the new projection. "Congress must act to protect and strengthen the Social Security that Americans have earned and paid into throughout their working lives," AARP CEO Myechia Minter-Jordan said in a statement following the release of the report. Minter-Jordan said that "as America's population ages, the stability of this vital program only becomes more important."
Yahoo
2 days ago
- Business
- Yahoo
Planning to Retire in the 2030s? Read This Before You Collect Your First Social Security Check.
Social Security is projected to run out of money by 2035, according to the latest report. It's important for those within a decade or so of retirement to know where things stand, beyond the headlines. The worst-case scenario might not be as bad as you think, and there's plenty of time to fix the problem. The $23,760 Social Security bonus most retirees completely overlook › You may have heard that Social Security isn't exactly on the best financial footing, and that's true. Although the Social Security trust funds have trillions in reserves right now, the reality is that Social Security is paying significantly more money to beneficiaries than it is taking in, and the deficits are expected to get far worse in the coming years. In fact, the latest estimates from the Social Security Board of Trustees project that the combined trust funds for the Old Age and Survivors Insurance and Disability Insurance trust funds will be depleted by 2035 unless something is done. While this might sound like an emergency, especially if you're planning to retire in the next decade, it's important to take a step back and put things into perspective. So, here's what Social Security running out of money could mean for you, and what is the most likely scenario. For sake of argument, let's say that the latest trustees' report projection happens, and Social Security's trust funds completely run out of money in 2035. At the end of 2023, the latest year for which we have final data, the Social Security trust funds had a total of about $2.8 trillion in reserves. The program took in a total of $1.35 trillion in income between payroll taxes, taxes on certain Social Security benefits, and interest earned on the reserves, and paid out about $1.39 trillion -- a roughly $40 billion deficit that is withdrawn from the trust funds. But the key thing to emphasize from that last paragraph is that most of Social Security's benefits are paid from income coming into the program, not from the reserves. So even if the deficits get much larger and the trust funds are depleted in 2035, there will still be payroll and other tax revenue coming in. In fact, the latest projections found that even if the trust funds are allowed to run out of money entirely, incoming revenue will be able to cover 83% of scheduled benefits. In other words, in a worst case scenario, if you were expecting a $2,500 monthly Social Security retirement benefit based on your work record (you can view an estimate for yours by logging in at you would still receive monthly checks of $2,075 even if Social Security was completely out of money. One big reason Americans are nervous about the Social Security shortfall is that it's been a known problem for a long time. I've been writing for The Motley Fool since 2011, and the Social Security Trustees Report from that year found that the trust funds would be depleted by 2036, just one year later than the current estimate. So why hasn't anything been done? The short answer is that the ways to fix Social Security are politically divisive, and quite frankly, with a decade or more of financial runway, those in power simply haven't made Social Security reform a priority. To be fair, there have been some significant tweaks, such as eliminating the "file and suspend" loophole a few years ago, but nothing major has been done to extend the program's solvency. Having said that, it's worth noting that we've seen a similar situation play out before. In the early 1980s, Social Security was just a few months away from running out of money, and the Social Security Amendments of 1983 helped stabilize the program for the next few decades. Just to name one provision, this round of reforms is why the full retirement age has gradually risen from 65 to 67 over the past couple of decades. The bottom line is that history shows us that something will be done to bolster Social Security's financial situation, even if it happens at the last minute. And while the exact reform package remains to be seen, it's also worth noting that virtually nobody is talking about benefit cuts for those currently receiving payments, or those who are close to retirement age now. If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known could help ensure a boost in your retirement income. One easy trick could pay you as much as $23,760 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Join Stock Advisor to learn more about these Motley Fool has a disclosure policy. Planning to Retire in the 2030s? Read This Before You Collect Your First Social Security Check. was originally published by The Motley Fool
Yahoo
3 days ago
- Business
- Yahoo
Could You Survive Retirement Without Social Security?
Per the Social Security Board of Trustees, the Social Security Administration (SSA) will be out of money by 2034. From that point, only approximately 78% of Social Security benefits will be covered by annual taxes. Learn More: Check Out: This funding gap is due to a dwindling working-age population, longer life expectancies and a spike in retirees (in 2035, there will be over 78 million Americans over the age of 65, as opposed to the 56 million today). These numbers will pose an existential drain on Social Security, leaving it funded only by payroll taxes by 2035. While those payroll taxes will keep Social Security alive, it will be to a much lesser extent. As time goes on, the SSA may struggle even further. It all leads to a simple, serious question: Could you survive retirement without Social Security if you had to? First, take a look at the cost of a Social Security-free retirement. According to the SSA, as of June 2025, the average Social Security monthly benefit payment is approximately $1,950.27. That monthly amount comes to just about $23,400 per year. Extrapolating those numbers further, that means Social Security across a 20-year retirement would equal $468,000 in Social Security payments. For a 30-year retirement, that comes to $702,000 in benefit payments. All of which means that, for a 20-to-30-year retirement, one should receive $468,000 to $702,000 — which also means that's the amount of money you'd need to save in order to survive retirement without Social Security. Be Aware: Take a look at your savings and investment accounts — are you on track to have $702,000 (at minimum) by age 65? Or even $468,000? Saving, and saving early, is the best was to put yourself on track to be able to retire without Social Security. A good rule of thumb regarding savings is the 50/30/20 rule, in which 50% of your income is used to pay for your needs, 30% for wants and 20% for savings. Consider even switching to 30% for needs and 20% for wants if you are behind. Important to remember, though, is that some Social Security will still be available in 2035, but for the most comfortable retirement, you cannot rely solely upon that. More From GOBankingRates 6 Popular SUVs That Aren't Worth the Cost -- and 6 Affordable Alternatives This article originally appeared on Could You Survive Retirement Without Social Security? Sign in to access your portfolio
Miami Herald
15-05-2025
- Business
- Miami Herald
Social Security Retirement Age Changes: When Can You Claim?
The full retirement age for Social Security is shifting again in 2025, marking a continued transition that affects millions of Americans approaching retirement. For those born in 1960, the age to receive full benefits has officially risen to 67. The increase in the full retirement age (FRA) reflects a phased change that began with the 1983 amendments to the Social Security Act, intended to account for longer life expectancy and financial solvency concerns within the program. The FRA is the age at which seniors become eligible to access Social Security retirement benefits without a financial penalty for retiring early. In 2025, Americans born in 1960 will turn 65—but they won't reach full retirement age (FRA) for Social Security until 67. This is the latest benchmark in a phased two-year increase from the traditional age of 65 to 67, first enacted in 1983. People can still claim Social Security as early as age 62, but doing so comes at a permanent cost. Early claimants receive a reduced monthly benefit—about 30 percent less than they would have at 65, now 67. Waiting until FRA ensures the full benefit amount. Delaying benefits beyond FRA, up to age 70, further increases the monthly payment due to delayed retirement credits. The Social Security Administration's latest guidance outlines these differences: someone eligible for a $1,000 monthly benefit at age 67 would receive only $700 a month if they claim at 62. If they waited until age 70 increases that monthly amount to $1,240—a 24-percent boost for delaying three years past the FRA. People born before 1960 can claim their full benefit in 2025, those born after—who will turn 65 in 2025—must wait until 2027 to receive their full retirement benefits at age 67, as confirmed by the Social Security Administration. If you're a bit older than those born in 1960, you can still claim earlier than 67: If you were born between 1943-1954, the FRA is 66 you were born in 1955 - 66 years and two you were born in 1956 - 66 years and four you were born in 1957 - 66 years and six you were born in 1958 - 66 years and eight you were born in 1959, - 66 years and 10 months. The change, though decades in the making, is starting to hit more Americans who are now entering retirement. Nearly 4 million Americans are expected to turn 65 in 2025—part of the ongoing "silver tsunami" demographic shift of retiring Baby Boomers. This marks the last scheduled increase under the 1983 law. Social Security actuaries have long warned that the program is facing a projected shortfall. The trust fund for retirement benefits could be depleted by 2033, after which the system would be able to pay only 77 percent of scheduled benefits, according to a 2024 report by the Social Security Board of Trustees. Lawmakers are divided on how the shortfall should be addressed. Republicans have supported the raising of the retirement age. In March 2024, prior to the presidential election, the Republican Study Committee, comprising 170 GOP lawmakers, published a budget proposal that would include "modest adjustments to the retirement age for future retirees to account for increases in life expectancy" to tackle the solvency issue. Most recently, Rhode Island Senator Sheldon Whitehouse and Representative Brendan Boyle of Pennsylvania, both Democrats, reintroduced the Social Security and Medicare Fair Share Act, which would impose payroll taxes on earnings above $400,000—an income segment currently exempt due to the existing tax cap of $168,600. Michael Ryan, a finance expert and the founder of told Newsweek: "This isn't just a bureaucratic adjustment but a response to increasing life expectancies and the financial challenges facing Social Security." Boyle said in a press release regarding the Social Security and Medicare Fair Share Act: "This bill would protect Social Security and Medicare for generations by making the wealthiest Americans pay what they owe. While Republicans are pushing a $7 trillion tax giveaway to the ultra-rich, we're working to protect the benefits that millions of Americans have earned—and we won't let them be stolen to fund another billionaire windfall." There are currently no recent legislative efforts to raise the FRA further, but future changes remain possible as policymakers seek to preserve Social Security's solvency. Related Articles Social Security Benefits to Be Confiscated for Nearly Half a Million PeopleIs No Tax on Social Security in GOP House Bill? What to KnowSocial Security COLA 2026 Increase Update as New Prediction ReleasedSocial Security Users To Get $4,000 Boost in Payments: Who Is Eligible? 2025 NEWSWEEK DIGITAL LLC.
Yahoo
18-04-2025
- Business
- Yahoo
Social Security Benefit Cuts Are an Estimated 8 Years Away -- Is Immigration to Blame?
For more than eight decades, Social Security has been the most important government program for retirees. Even though the average monthly benefit of $1,980.86 (as of February 2025) is relatively modest, this payout plays a key role in forging the financial foundation for many retired workers. In each of the last 23 years, national pollster Gallup has surveyed retirees to determine how important their monthly check is from Social Security. In every poll, between 80% and 90% of retirees have noted they require their payout, in some capacity, to cover their expenses. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » While Social Security has historically been a fortress of stability since the first retired-worker check was mailed out in January 1940, America's leading retirement program is on anything but stable ground today. The possibility of benefit cuts is rapidly approaching and many folks are asking: Is immigration to blame for Social Security's worsening financial outlook? For 85 years, the Social Security Board of Trustees has released an annual report detailing the financial health of Social Security. This report allows anyone to examine how the program collects income and where those dollars end up. More importantly, the Trustees Report is known for making data-driven projections about the future financial health of Social Security. The Trustees take into account changes in fiscal and monetary policy, as well as a host of demographic shifts, when estimating how financially sound the program is for future generations of beneficiaries. For 40 consecutive years, the Trustees have cautioned that long-term (defined as the 75 years following the release of a report) income collection won't be sufficient to cover outlays, such as benefits and, to a lesser degree, administrative expenses. This long-term funding obligation shortfall had grown to a whopping $23.2 trillion, as of 2024. What's even more worrisome is the Trustees' outlook for the Old-Age and Survivors Insurance Trust Fund (OASI). According to the 2024 Trustees Report, the OASI's asset reserves are expected to be exhausted by 2033. The good news is that the OASI doesn't require asset reserves to remain solvent. As long as people continue to work and pay their taxes, the 12.4% payroll tax that's the primary funding mechanism of Social Security will ensure that eligible beneficiaries receive a monthly check. In other words, there's no danger of bankruptcy or insolvency for the OASI or Social Security. However, the absence of the OASI's asset reserves would signal that the existing payout schedule, including annual cost-of-living adjustments (COLAs), isn't sustainable. Per the Trustees, a 21% reduction to Social Security checks may be needed by 2033 (if the asset reserves are fully depleted) to avoid any further reductions through 2098. Social Security's widening long-term funding deficit, as well as its shrinking OASI asset reserves, points to trouble for America's leading retirement program. The big question is: "What's led to these issues?" On social media message boards, it's not uncommon to see posts assigning blame to migrants coming to America. In particular, some share the opinion that undocumented migrants have drained Social Security's asset reserves. What can be said with concrete certainty is that immigration is to blame for some of Social Security's financial not for any of the reasons often cited on social media message boards. Legal migration into the U.S. is a necessity for Social Security's financial health. Most migrants that legally come to America are young, and will therefore spend decades in the labor force contributing via the payroll tax before one day collecting a Social Security retired-worker benefit of their own. This steady influx of legal migrants is needed to counterbalance workers retiring from the labor force. Based on data from the United Nations, the U.S. net migration rate (i.e., the people legally entering the U.S. minus those leaving the country) was nearly halved between 1997 and 2023. Since peaking at 1,866,819 in 1997, net migration tumbled to 999,700 in 2023. According to the intermediate-model forecast from the 2024 Trustees Report -- the intermediate model is the model that's considered likeliest to occur -- the U.S. needs to average 1,244,000 legal net migrants per year (through 2098) to stay on the current course, which is the aforementioned long-term funding shortfall of $23.2 trillion. With not even 1 million net legal migrants entering the country in 2023, it signals that Social Security's 75-year funding shortfall is likely to grow. In short, Social Security's immigration problem boils down to not enough legal migrants entering the country. However, one aspect of immigration that's absolutely not an issue for the traditional Social Security program is undocumented migrants. The reason undocumented migrants are often blamed for Social Security's financial woes likely has to do with people conflating the traditional Social Security program, which pays retired-worker, disability, and survivor benefits, with Supplemental Security Income (SSI), which provides payments to people with limited income and resources. Though the Social Security Administration oversees both programs, they're completely separate and funded differently. SSI can provide income to asylum seekers, and is funded entirely through the General Fund. In comparison, the traditional Social Security program is funded by the 12.4% payroll tax on earned income, the taxation of Social Security benefits, and the interest income generated from its asset reserves, which is invested in special-issue government bonds, as required by law. Undocumented workers are unable to receive a retired-worker benefit, and they're afforded none of the disability or survivor beneficiary protections tied to the traditional Social Security program. And interestingly enough, undocumented migrants do positively impact Social Security. Based on a 2014 analysis from New American Economy -- "a bipartisan research and advocacy organization" -- researchers estimate that undocumented workers contributed $100 billion to Social Security over the previous decade. To put this into some context, around 1% of Social Security's annual income can be attributed to undocumented migrants who won't receive a dime in future benefits. Immigration absolutely is part of the reason Social Security is eight years away from sweeping benefits cuts -- but it's a story of too few legal migrants and has nothing to do with undocumented workers taking benefits from the program. If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known could help ensure a boost in your retirement income. One easy trick could pay you as much as $22,924 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Join Stock Advisor to learn more about these Motley Fool has a disclosure policy. Social Security Benefit Cuts Are an Estimated 8 Years Away -- Is Immigration to Blame? was originally published by The Motley Fool Sign in to access your portfolio
