The vast majority of U.S. citizens are concerned about their future Social Security receipts, with such anxieties popping up amid the projected depletion of Social Security funds over the next decade.
“But at the same time, 72 percent of all Americans are concerned that promised Social Security benefits won’t be paid to them upon retirement age.”
Generation-wise, baby boomers and Gen X are most anxious, with more than 80 percent worried about the issue. Among millennials and Gen Z, this number was between 60 percent and 70 percent.
For a typical single-income couple, this indicates an annual benefit reduction of $12,400, with dual-income couples losing $16,500. By 2098, the 21 percent reduction is projected to rise to 31 percent.
With millions of people relying on Social Security to pay for daily necessities, a more than one-fifth reduction in monthly receipts could be broadly devastating.
“There’s a vast divide between Americans’ concern about the looming Social Security funding shortfall and the lack of serious and thorough conversation among elected officials about what to do about it,” Bankrate Senior Economic Analyst Mark Hamrick said. “The result is that the American public’s financial well-being is not being tended to.”
Tackling Social Security Solvency Crisis
A recent study from the Employee Benefit Research Institute shows how critical Social Security payments are for retired Americans.For the 80 percent of respondents who said Social Security was an income source, it accounted for roughly half of their total earnings.
The majority of retirees have only three months’ worth of savings put aside for emergencies. As such, any reduction in income puts them in financial distress.
Facing a looming crisis in Social Security, lawmakers have proposed measures to tackle the issue, which vary depending on the political party. Last February, a group of Democrat lawmakers and Sen. Bernie Sanders (I-Vt.) introduced the Social Security Expansion Act.
The bill proposed requiring wealthy American households to “pay their fair share of taxes,” which it claimed could keep Social Security solvent for an additional 75 years. Specifically, it suggested imposing a 12.4 percent tax on business and investment income of wealthy people.
On the other hand, President-elect Donald Trump proposed during his campaign that he would cut down taxes for Social Security payments received by seniors.
The bill proposes doing away with the generic measure of inflation to decide annual cost-of-living adjustments to Social Security payments. Instead, it wants to use an inflation gauge that specifically measures the living costs incurred by senior citizens. The act also seeks to phase out limits on Social Security contributions.
“Social Security provides crucial support to millions of kupuna [elders], people with disabilities, and other vulnerable communities in Hawaii and across the country,” Sen. Mazie Hirono (D-Hawaii) said.
“By lifting the cap on Social Security contributions, the Protecting and Preserving Social Security Act will help ensure Social Security remains solvent for decades to come.”