By Suzanne Potter
The combined Social Security trust funds’ reserves will be depleted in late 2034, forcing automatic benefit cuts if nothing changes, according to a new report from the Social Security trustees.
The program is not going broke but it would be able to pay only 83% of scheduled benefits starting then.
Tod Story, executive director of AARP Nevada, said about 500,000 older Nevadans would see their payments cut by about $300 per month.
“It’s $300 that Nevadans simply cannot afford to lose,” Story stressed. “Congress is going to have to act in order to preserve this program that people have earned over a lifetime of work and contributed to.”
In 1983, Congress raised Social Security payroll taxes and increased the eligibility age for benefits to 66 or 67, depending on when a person was born.
Right now, the federal government collects just over 12% in Social Security taxes on the first $184,500 in income. A bill from Sen. Bernie Sanders, I-Vt., would have wealthy people pay more by raising the income cap to $250,000 and extending the tax to capital gains and business income.
Story noted AARP is not endorsing a specific plan but said Congress has the power and ability to repair Social Security’s finances.
“They have the tools to fix this,” Story asserted. “The sooner that they act, the easier the fix will be, and so we hope that they don’t wait till the last minute to come up with the solutions for preserving Social Security in perpetuity.”
A second bill, called the Medicare and Social Security Fair Share Act, would raise the cap on taxes further, to $400,000 a year and aims to extend the life of both programs by 75 years.
