Three months into 2024 and its April season marking National Social Security Month where benefits and payments going to qualified retirees , Children and other people will gain the benefits at some points of their lives but for those of us that don’t have an exact plan to retire within the next 10 to 15 years still are hoping for the fund to be solvent by the year of 2034.
Social Security is becoming a hot topic as America is heading to the 2024 election with President Biden and Former President Donald trump commenting on social security while on the campaign trail.Â
According to a Social Security and Medicare Boards of Trustees report in 2023, there is a potential for Social Security to become insolvent by 2034. With many Americans depending on social security benefits after retiring, cuts to benefits are worrisome. With long term funding concerns workers are wondering if they will ever see the money mark.
So to answer the question, why are so many retirees getting smaller amounts of benefits than expected?
Changes in the Cost of Living Adjustment (COLA): Social Security is a very unique source of retirement income, making it the only government backed inflation adjusted and tax advantage source of income that anyone is going to have and squandering it may be a big mistake. Social Security benefits are adjusted annually based on changes in the cost of living. The COLA adjustment or that inflation competent is a big part of making good decision making. According to Social Security Administration the Social Security and Supplemental Security Income (SSI) benefits for more than 71 million Americans will increase 3.2 percent in 2024 lower from 8.7 percent of 2023. Most Americans are fearful that their Social Security trust fund is running out of money questioning if Social Security still be around for future generations.
And Yes Social Security isn’t going anywhere , but there will be some bumps in reduced benefits.
Policy Changes: Changes in government policy or legislation related to Social Security can also impact benefit amounts. This could include changes in benefit calculation formulas, eligibility requirements, or other factors.
The Trust Fund is expected to be depleted by 2033 and if that happens where Congress doesn’t act in order to Shore up the trust fund then we could see reduced benefits in the future. It’s essential for retirees to stay informed about changes in Social Security policies and regularly review their benefit statements to ensure they have an accurate understanding of their expected benefits. Consulting with a financial advisor or Social Security representative can also help retirees plan effectively for their retirement income.