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My wife started her professional career in 1979, and I in 1980.
I previously wrote an article on Humble Dollar where I tried to research the points covered below by Mark Miller who is considered one of the nation’s leading experts on retirement and aging. In a recent article on Morningstar’s website he warns of the effects of the bill recently signed into law. He writes that if congress does nothing to shore up Social Security the trust fund is projected to be emptied by 2032, one year earlier the previous estimate.
He writes: If we reach that point (barring action by Congress), benefits would be cut across the board by 23%—a reduction that would be catastrophic for lower-income seniors who depend on Social Security for most or all of their income.
It would also be unfair for younger people, who already bear the brunt of the benefit cuts made in the last major reform of Social Security in 1983. That law set in motion a gradual increase in the full retirement age—the age when you can claim 100% of your earned benefit—from 65 to 67 for workers born in 1960 or later. Every one-year increase in the full retirement age is equivalent to a roughly 7% cut in monthly benefits.
My wife and I are facing nearly a 30% cut in our Social Security benefits by the time we claim at 70 in 2028 compared to the benefits we would have qualified for when we first started paying into the system.
But think about all the benefits you and your wife are gaining compared to being born 50 years earlier!
no one is talking about immigration policies and Social Security. Here is a piece about it : https://bipartisanpolicy.org/explainer/immigration-social-security-solvency/
I saved that link to share when appropriate.
I have been explaining to people that without increasing immigration we will be faced with a continuation of decreasing population resulting in a continuing decline in the number of workers, and a decrease in contributions into the Social Security Trust Fund. Without either a significant increase in the birth rate (unlikely) or immigration we will eventually experience a decrease in our country’s GDP, and our standard of living.
I’d love to see birthrates increase, but when financial survival depends on having both spouses work full time, I don’t see it happening.
Countries with declining populations are in for hard times. The USA is in a potentially good position due to immigration. Also don’t forget Jonathan’s contention that encouraging people to stay in the workplace longer would help as well.
Here is what an article today on MarketWatch says.
”Most working people can expect to receive Social Security, as well. Although some sort of cut to Social Security is now all but inevitable, there are a couple of cushions for future retirees.
The first is that cuts are likely to be at the expense of future rises in Social Security payments. You may get less than you were expecting, but you probably won’t get less than people are getting today.
Second, those cuts are probably going to fall most heavily on the highest earners.”
Well, my wife and I have received in benefits all I and my employers paid in taxes since 1959 and we did that eight years ago, but I get your point.
Benefits will not be cut, but neither will the funding be fixed before the end of 2028. The farce of making SS benefits income tax free tells you where our leaders heads are.
I disagree younger people were hurt by the 1983 changes, those changes were necessary.
However, not making current necessary changes until the last minute is unfair to current workers who will pay the price while necessary changes should have been made decades ago while those of us collecting for many years were still working.
“I disagree younger people were hurt by the 1983 changes, those changes were necessary.”
I didn’t say they were unnecessary, just that if you take what our projected benefits would be when we first started, subtract the 7% effective cut by increasing the full retirement age to 67, then add the 23% cut if congress does nothing to fix Social Security, we will experience an effective 30% in benefits from what we could have expected if no changes, or lack of changes occurred.