THERE’S FREQUENT TALK of fixing Social Security so that the benefits paid out don’t greatly exceed the Social Security payroll taxes that are collected. There are different fixes being bandied about, including raising the eligibility age for Social Security and even means-testing benefits.
Eventually, there will likely be some fix made, but you shouldn’t be too alarmed by that prospect. First, Social Security’s unfunded liability is considerably smaller than that for Medicare, and thus it could probably be addressed without action that’s too drastic.
Second, any major changes to Social Security will likely only apply to those under age 50 or 55, so younger workers should have plenty of time to adjust and potentially compensate by saving more for retirement.
What if you are already retired? It’s almost inconceivable that any politician hoping to get reelected would vote to cut benefits for those who have reached retirement age. The outcry would be deafening. One implication: If you’re, say, age 62, you shouldn’t rush to claim benefits now, fearing the government will slash your Social Security benefit.
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