Last updated on May 8, 2023
| Many millennials are not factoring Social Security benefits into their retirement planning due to the belief that the retirement and disability program is going bankrupt. The Social Security Trustees Report projects that the trust fund reserves will be depleted by 2033, one year sooner than projected last year. However, experts say that if the trust fund is depleted, the Social Security Administration will continue to take in payroll taxes, allowing the program to pay the majority of benefits, but with a 25% cut. This would hit low-income Americans hardest, leading to a spike in poverty rates for older Americans. There are a number of proposals to shore up the trust fund, such as raising the wage cap on taxes or raising the payroll tax rate slightly. Lawmakers have stepped up in the past to fix the issue, and experts are hopeful that the issues will be fixed, as they have been in the past |
Complex Terms:
- Social Security Benefits – Government aid for retired, disabled, or bereaved individuals or families.
- Trust Fund – Financial instruments used to manage assets for the benefit of one or more beneficiaries.
- Payroll Taxes – Taxes levied on wages and salaries earned by employees to fund social welfare programs.
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