The United States trust funds have been at the limit for some time now. The latest news announces that there will be funding problems after the year 2035. This means that after that year Social Security will not have enough money to pay all retirement benefits. This news is really negative because it forces Congress and the United States Government to act quickly if it does not want to have major problems.
Workers know that this situation is very real. That’s why many of them want to make their contribution to the Social Security funds by stretching their working years. Or at least that is the plan that 6 out of 10 workers surveyed with less than 55 years of age have. With this information we can say that in that case, yes, part of the SSA funds can be saved, making retirement benefits more viable.
Many workers want to help Social Security
According to the Bank of America Research Investment Committee (RIC), 6 out of 10 workers want to stretch their working lives. This means that most would work until at least age 64. All those who planned to retire under the Full Retirement Age will reach the age of 69, which is almost the working age limit for U.S. citizens. Remember that age 70 is the cutoff age. After that age there is no extra retirement bonus from Social Security Administration.
This increase in years worked by workers is because they do not fully trust the system. So many changes in prices, inflation and general budget cuts make them prefer to work longer. By working longer, they achieve two fundamental objectives:
- To achieve more savings: the more years worked, the more savings can be achieved. Once you ask for retirement, this means you will have more money to spend.
- More contributions to Social Security: The SSA will receive more in taxes if workers are working longer. Therefore, the trust funds will increase and more pensions can be paid out.
When is it best to apply for retirement?
Knowing that in a few years it is possible that the Social Security Administration may have financial problems, it is good to consider when it is best to apply for retirement. It all depends on your lifestyle and how much savings you have. There are 3 things to keep in mind before applying to Social Security for retirement:
- Will I get a discount on my Social Security payment if I apply early?
- Can I afford to delay retirement?
- Will I stop working or continue working?
With these questions in mind, we need to know whether it is really worth applying to the Social Security Administration for retirement or not. For the time being, most prefer to hold out a little longer and have the funds increase, although it may not be sustainable for the health of all workers.