The Social Security trust funds are projected to become insolvent in less than seven years, according to recent estimates from the program’s Trustees and independent projections. The impending insolvency would lead to a significant reduction in benefits for millions of retirees.
By 2032, the Social Security retirement program is expected to be forced to reduce payments by 24%, with an estimated annual cut of $18,100 for dual-earning couples retiring at that time. This would translate to a smaller benefit cut for single-earner couples and low-income individuals, but still represent a significant share of their income.
The Medicare Hospital Insurance program would also face cuts, with an 11% reduction in payments, affecting access to healthcare services. The benefit cuts are expected to grow over time as scheduled benefits continue to outpace dedicated revenues.
Policymakers who have pledged not to touch Social Security are implicitly endorsing these deep benefit cuts, which could affect 62 million retirees by 2032 and beyond. It is now essential for policymakers to address the program’s finances through trust fund solutions, ensuring a sustainable future for current and future generations.
Source: https://www.crfb.org/blogs/retirees-face-18100-benefit-cut-7-years