Social Security is projected to experience a revenue shortfall as baby boomers retire, with trust funds estimated to be depleted by 2034, leading to only 81% of benefits being paid. The implications of broad benefit cuts are concerning because millions of older Americans depend on Social Security as their main income source. Discussions around solutions include raising or eliminating the wage cap, which currently limits Social Security taxes on higher earnings. Although this might improve funding, it does not entirely resolve the potential shortfall issue.
Social Security is facing a revenue shortfall in the coming years as baby boomers retire in masses. The Social Security Trustees estimate that the program's combined trust funds will be out of money by 2034.
Once that happens, Social Security will only be able to pay about 81% of scheduled benefits. Broad benefit cuts could have very dire consequences, though.
Millions of older Americans rely on Social Security for retirement income. For many people who no longer work, those benefits are the only income they have.
One option that's been discussed is lifting or eliminating the Social Security wage cap. Higher earners do not automatically pay Social Security tax on all of their income.
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