Some Experts Advise Americans to Prepare Now for Social Security Benefit Cuts
Some economics experts warn that Americans – particularly those under the age of 50 – should start preparing now for expected cuts in Social Security benefits, according to a recent New York Times story.
Because of the bad economy, Social Security will pay out more in 2010 than it takes in. According to the latest benefits report from Social Security trustees, it will be able to pay full benefits through 2037. If no changes are made to the program, it will only be able to pay out 75 percent of benefits through 2083.
Recently, House minority leader John Boehner (R-Ohio) proposed raising the age of retirement to 70 for those who are at least 20 years away from retirement. There have also been proposals to raise Social Security payroll taxes, cut cost-of-living increases and reduce initial benefits payments.
What this means for Americans in their 20s, 30s and 40s is that they will probably need to put more money away for retirement than they may have planned to, to offset any cuts in Social Security benefits.
One Boston University economics professor ran the numbers for the Times and found that if the retirement age was raised to 70, this would mean a nearly 20 percent cut in benefits.
If you are interested in developing a retirement plan that minimizes these kinds of potential risks to your financial future, contact our Jacksonville estate planning law firm.
