Within retirement in the United States, the Social Security Administration is essential for U.S. citizens. Although it is advisable not to rely on the Social Security check alone, the truth is that many Americans have no other source of income. With this dependence, it is only natural that every change from the SSA has a direct impact on the lives of Americans.
However, the problem that the Social Security Administration is currently facing can put the entire society in a very difficult situation. Currently the payments the SSA makes to beneficiaries are so large that the funds could run out in a matter of years. It is estimated that by the year 2035, users will have a 30% cut in monthly retirement checks.
This could be the case unless it is remedied and there are general changes. For this reason, Washington is offering a series of changes so that the Social Security Administration does not run out of funds in the short or long term. Although these changes are not definitive and, of course, there is still no final solution that will help the SSA pay all the checks in the future.
Washington’s proposed changes to Social Security
These changes do not have to be implemented immediately. They are proposed changes to improve the health of Social Security. Because of these changes, the Administration’s funding could be greatly improved.
- Raise taxes on the wealthy. With this measure, the government could start collecting tax money that it did not collect before. Many retirements would be secured through this measure.
- Raise the full retirement age. This measure will not be very popular with everyone, but it is possible that by changing the full retirement age from 67 to 68 or 70, the system will improve. High longevity would ensure many years of rest after applying for retirement.
- Change the payroll tax. Increasing the payroll tax itself from 6.2% to 6.5% would help get more funds to the SSA.
- Reduce the benefit cheque. This would only occur for Social Security beneficiaries with the largest cheques. This measure would help tremendously in not depleting SSA funds.
As we have discussed before, these measures have not been done as of today, but are in the pipeline. The changes are on the table, but that does not mean that they will finally be made.
What is certain is that the Social Security Administration could be in serious trouble in less than 10 years if the government does not make changes. At the moment we can only wait to see what will finally happen with this funding problem.