A new analysis from a fiscal policy think tank shows that the outlook for the Social Security program will be grim if its trust funds are exhausted by 2032.
WASHINGTON — Social Security recipients could see their monthly incomes drop by $500 by 2032 if the program’s trust fund fails, a new report finds.
new analysisA report from the Committee for a Responsible Federal Budget, a fiscal policy think tank, shows that if retirement trust funds are exhausted in 2032, the outlook for Social Security programs will be grim. More than 63 million Americans are enrolled in Social Security programs.
Over the past 16 years, benefit costs have exceeded its cash receipts, prompting the plan to dip into its trust fund reserves. If Congress makes no changes, the trust fund is expected to be depleted by 2032.
Bankruptcy That doesn’t mean Social Security payments will stop altogether, but it does mean the amount each beneficiary receives will be significantly reduced. The report found that once the trust fund is depleted, benefits will automatically be cut by 24%.
The cuts will span 29 states, with retirees in Connecticut, Delaware, Maryland, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, Utah and Washington state suffering the biggest cuts.
“No country is immune to the potentially devastating effects of bankruptcy. With less than seven years until Social Security is expected to go bankrupt, policymakers need to make changes to the program quickly to prevent these scenarios,” CRFB said in the report.
Which states are most affected?
- Connecticut – $556
- New Jersey — $554
- New Hampshire — $553
- Delaware — $549
- Maryland — $541
- Washington — $531
- Minnesota — $530
- Massachusetts — $527
- Michigan – $523
- Utah – $523
The national average cut is $500.
1983the plan was just months away from bankruptcy and needed urgent revisions to ensure benefits were paid. Reforms in 1983 It also results in an increase in the retirement age, among other eligibility changes.
Without trust funds, Social Security can only pay about 80% of benefits from income. Payroll taxes.
What is Congress doing to avoid bankruptcy?
legislators on how keep going.
In March, the Senate Budget Committee held a hearing on the issue.
“We can do this,” Sen. Sheldon Whitehouse, D-R.I., said during a March 25 hearing. “It’s actually not that difficult or complicated. The sooner we do this, the better off everyone will be.”
Any new law related to Social Security would need to meet a 60-vote threshold in the Senate.
legislators have Proposed options Including cutting benefits for those who can afford it, increasing payroll taxes on high earners or creating investment funds to help Planned finances.
