All the working American usually required pays the social security whose primary role is to help them be reliant in future. Once they retire, they typically start receiving the benefits that assist them in managing their expenditure. The social security is America’s most stable social program as it caters for more than 90 percent of the working Americans. However, there have been concerns recently that some Americans might be reduced.
Full retirement age
The social security administrators typically use the retirement age which is calculated based on the year of birth to establish the workers who are eligible for the full benefits. Workers can claim some of their benefits before reaching their full retirement age. However, if this is the path that you decide to take, then you must note that you are accepting a reduction in your future monthly payout once you retire.
You can, however, boost the monthly payouts that you get after you retire by not receiving your monthly benefits until you retire. Since there have been suggestions to increase the retirement age, this means that the full retirement age is also increasing. What this means is that there are some of the beneficiaries who will have to wait before they start receiving their monthly payouts.
Taxation is another issue that might lead to the social security benefits being reduced. Different regimes have introduced different taxation measures in a bid to raise money to run the government efficiently. The social security benefits are just one of the many areas that the government has increased its tax over the past three decades. With the increased taxation, beneficiaries of the social security program are likely to have a reduction in their benefits.
Purchasing power is on a decline
Another concern that most of the retirees are wary about is the declining purchasing power of the social security dollars. A research that was conducted recently, for instance, found out that the social security dollar had decreased by 30 percent in the last 18 years. What that means is that goods that were worth $1,000 in 2000 are $700 in 2018. This is caused by the inaccuracy of the annual cost of living of the social security which does not take into consideration the true inflation that the retired citizens are facing.
Payout schedule unsustainable
According to the report that was released recently by the board of trustees, the program would face significant funding challenge in the next 70 years. It was discovered that by 2015, it would begin paying more benefits than it received which means that it will be operating at a loss. This means that the program is not sustainable on a long-term basis. Watch the video below for the social security benefits