IS A 25% CUT IN SOCIAL SECURITY BENEFITS INEVITABLE?

   By Kathleen Nelson on June 10, 2014


In May 2014 the Social Security Administration Chief Actuary Stephen Gross warned a Senate panel that social security benefits could be cut by 25% if Congress does not act soon to correct the problem. He noted that the Disability Insurance trust fund reserves are expected to be at zero by the end of 2016, and suggested that funds could be diverted from the Old Age and Survivors fund to the Disability Insurance fund. However, this could result in both funds depleted by 2033. Warnings that social security will be greatly reduced or disappear altogether appear regularly in the news. I've been hearing about the negative effect the Baby Boomers will have on social security most of my life. Most retirees depend heavily on social security to survive in retirement. Over the years, Congress has made some minor adjustments to keep social security around for future retirees. But has it been enough to maintain and strengthen the system? That depends a lot on Boomer longevity and the number of young workers in the workforce who continue to contribute to the fund. Time will tell the tale. But are you going to be one of the retirees who have little or no income other than social security? It's time to explore alternative income sources before social security is reduces or disappears. Later might just be too late.




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