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Is Social Security Being Reduced?

Is Social Security Being Reduced?

April 19, 2023

If your Social Security benefits are cut, what impact could this have on your retirement portfolio?

Over the last few months, there has been a lot of talk around Social Security and the issues with the amount of money within the fund. In essence, the amount of money coming out of the Social Security fund is increasing faster than the amount of money going in. This has created sustainability concerns could create issues for retirees going forward.

The Congressional Budget Office warns that “…workers may see a 23% reduction in promised Social Security benefits by 2034 if there aren’t changes made.”

This is a big deal. There are millions of Americans that rely heavily on their Social Security benefits to be able to live.

The Academy of Actuaries also offered perspective, “If timely changes are not made, cutting benefits for future beneficiaries only may not be enough to achieve solvency…Instead, benefits for those retirees already receiving benefits may have to be cut, or Social Security’s income may need to be increased.”

For many people, Social Security is only a part of their retirement income, but it’s still an important part, and a reduction in the benefits could be life changing.

In an effort to show the possible impact to a retirement plan, we created a sample retirement plan so that you could see what a reduction in Social Security could do. 

We’ll also briefly discuss how this might impact your decision of when to file for Social Security benefits as well as some possible solutions being introduced.

Breaking Down the Numbers

If we assume a $30,000 Social Security benefit, a reduction of 23% would equate to $6,900 in less Social Security income each year (30,000 x 0.23). Click HERE to find out more.