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Social Security has two other funding sources: benefit taxes on some seniors and interest income earned on money in the program's trust funds. But both of those are in danger right now. The ...
Should the Social Security reserves run out in 2035, benefit cuts could take various forms. The simplest cut would be an equal one across the board. Another option would be to cut benefits ...
When the trust funds run out, Social Security's remaining income sources will only be enough to cover around 83% of future benefits, according to the report. In other words, beneficiaries could ...
The Social Security system is primarily a pay-as-you-go system, meaning that payments to current retirees come from current payments into the system. The program was initially established in 1935 in response to the Great Depression. The first to file for Social Security was Ida Mae Fuller in 1940. [16]
Indeed, over fears that the system would run out of money in 1983, however, [5] Congress passed the Social Security Amendments of 1983, which created the Windfall Elimination Provision, which reduces the benefit formula for those with a non-covered pension as well as qualified for social security benefits.
In the United States in the late 1990s, privatization found advocates who complained that U.S. workers, paying compulsory payroll taxes into Social Security, were missing out on the high rates of return of the U.S. stock market (the Dow averaged 5.3% compounded annually for the 20th century [59]).
If the trust funds run out and the SSA can only pay out 83% of benefits, that means payments could be slashed by around 17% by 2035. The average retired worker collects around $1,925 per month ...
When the program collects more revenue than it pays out — which happened during the 1990s and 2000s — the money goes into the trust funds. When it operates at a deficit, as it has in recent ...