(PartiallyPolitics.com) – A Responsible Federal Budget (CRFB) nonpartisan committee found that in 2033 the average retired couple would experience a reduction of $17,400 in their Social Security benefits if the program continued this way.
The analysis determined that if politicians continued to not make any changes to the program then that would lead to a reduction in the benefits that people had as the Social Security trust fund would become insolvent in a decade.
The Old-Age and Survivors Insurance (OASI) trust fund at this pace is expected to run through all its reserves by 2033, that is when people who are currently 57 will be retiring at around the age of 72. The analysis found that once the fund becomes insolvent it will only be able to continue making payments that are equivalent to the funding it receives. As a result, it is expected to have a 23 percent reduction in Social Security benefits, or in other words a $13,100 cut for single-income individuals and a $17,400 cut annually for couples.
For low-income earners this would mean a $7,900 annual loss for individuals and $10,600 loss for couples, while for high-income earners that reduction would amount to $17,300 for individuals and $23,000 for high earners. These numbers are also bound to be higher when adjusted for inflation.
There are a few ways in which the program’s solvency can be extended, including increased taxation, higher eligibility age, a reduction in cost and other revenue-generating ideas, however politically all of these options are considered controversial.
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