Social Security Cuts Edge Closer to Reality. How Much of a Drop Should You Plan For?

Social Security provides a major share of income for many retired Americans. The average retirement benefit is about $2,801 per month, which can determine whether expenses are covered. The program faces a financial crisis as fewer workers contribute enough revenue to sustain scheduled benefits. The OASI Trust Fund is projected to run out of money by 2033 in one forecast and by 2032 in another. After depletion, Social Security may be limited to paying a portion of scheduled benefits, with one estimate implying a potential 23% cut. Future cut timing and magnitude depend on updated trust-fund projections and policy decisions by lawmakers.

"There's perhaps no more critical source of income for retired Americans than Social Security. The average retirement benefit today amounts to roughly $2,801 per month. And while that's not exactly a huge retirement salary, for millions of older Americans, it spells the difference between being able to cover expenses or not."

"Last year, the Social Security Trustees projected that the program's OASI Trust Fund would be out of money by 2033. At that point, they said Social Security would only be able to keep up with 77% of scheduled benefits, marking a potential 23% cut. Earlier this year, the Congressional Budget Office said it expects the OASI Trust Fund to run out of money by 2032. It's unclear as to whether that impacts the extent of cuts retirees might be looking at."

"Once the Social Security's Old-Age and Survivors Insurance (OASI) Trust Fund runs out of money, the program may be looking at widespread benefit cuts. And it's important to plan for that reality. How much might Social Security get cut, and when?"

"Social Security benefit cuts are not inevitable. The program has faced its share of financial woes in the past, and Congress has always managed to stave off benefits cuts. There's a good chance they'll be able to do the same this time around. But it's best to plan for Social Security cuts in case lawmakers"

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