If the pensioners of the world were told their benefits were going to be cut by 25 percent in 2033, I bet there would be picket signs and protests springing up in cities all across America. Meanwhile, we know for a fact – at least at this point – that Social Security benefits will be cut by 25 percent in 2033, and I sure as heck don’t see any protestors anywhere. In fact, it seems like people are taking such news in stride. They seem content to accept casually this cut in benefits that they’ve more than likely paid quite a bit of their own money toward.
Maybe if future Social Security recipients would fight for their benefits like pensioners and unions fight for theirs, Congress would get up off its duff and start doing something to improve the Social Security System’s situation.
2033 is still a long way off…or is it?
I’m sure that many people look at the year 2033 and think that it’s still a long way off. And given, a lot can happen in 20 years. But with the way Congress tends to spin its wheels inefficiently and push things back until the last minute, maybe it’s not such a long time after all.
Just think; 2033 is less than 20 years away. That means that even for those who are 60 years old as of 2013, this could affect them should they live to be 80. And for those in their 20s, well, with anywhere from 40 to 50 years left until they hit retirement age, this lack of funding could be whittling away significantly at their retirement benefits.
This cut effects a huge number of us
If you’re anywhere from age one to 75 – or even 80 with how long people are living these days – and will be taking Social Security benefits, you have a good chance of being affected by the projected Social Security shortfall in 2033.
The Social Security Administration reports that, “By 2033, the number of older Americans will increase from 45.1 million today to 77.4 million.”
It goes on to note that, “There are currently 2.8 workers for each Social Security beneficiary. By 2033, there will be 2.1 workers for each beneficiary.”
Long-term effect could be substantial
While the current generation on Social Security might not be so worried about an eventual benefits reduction, for those of us who are younger, it could have a significant and long-term impact.
For example, for someone set to receive a benefit of $2,000 a month at age 67 in 2033, at only 75 percent of estimated benefits, this amount could be reduced to just $1,500. If this beneficiary expects to live to age 80, the reduction could equate to almost $80,000 over time, and for someone who lives to the ripe old age of 90, nearly $140,000, and that’s without cost of living adjustments factored in.
So while cuts to pensions might be on many people’s radar right now, they might want to set a course toward intercepting the future issues with Social Security as well, if not for their sake, at least for the sake of their children and grandchildren.
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The author is not a licensed financial professional. This article is for informational purposes only and does not constitute advice of any kind. Any action taken by the reader due to the information provided in this article is solely at the reader’s discretion.