One of the big problems facing the United States Social Security Administration is the lack of money. The trust fund has less and less money and this means that there will be serious problems in the future. Experts are talking about a crisis within a few years. By 2035 it is quite possible that there will only be enough money to pay 80% of pensions. This means that many of the Social Security benefits will see quite a big reduction.
But all is not lost. There is still some hope for the future. Since there is still time until 2035 arrives, the action plans have started to work. Well, at least they have started to think about what might work. This way, Social Security would not have so many future problems and could pay all the benefits to retirees.
Taxes could increase to pay for Social Security
The main solution lawmakers are thinking about is to increase taxes. With this solution, there is a sector of society that would not be very happy, but it would be a good way to secure a large amount of funds in the future. These tax changes are not working yet, but it is very possible that in the future we will see this increase.
Thanks to a tax increase on higher salaries, Social Security payments could be made without any problems. In this way, the income of money would be equivalent to the payment of benefits, so there would be a balance that would completely stop that crisis with the payments. Since there is still time until that time, there is a chance that the solution will actually work.
Changes to the Full Retirement Age (FRA)
One of the other aspects that lawmakers could change would be the FRA. With such a change, U.S. citizens would retire later, but would have more options to qualify for a full benefit. On top of that, they would also have a higher monthly payout for working more years. The age could be set at around 68 or 69, although nothing is certain yet.
With these and other measures, it is possible that the SSA could have enough money to pay everything it has to pay. In other words, lawmakers could save the trust funds so they don’t run into future financial problems. It will all depend on how the industry actually evolves.
