Tax Advice Santa Rosa – WHAT HAPPENS WHEN SOCIAL SECURITY FUNDS RUN OUT?

February 13th, 2014 → 10:26 pm @ // No Comments

Without Congressional action, Social Security will become insolvent in 2033.

Benefits could shrink to 77% of the current levels and/or payments could be delayed. This subject comes up over and over again and Congress keeps kicking it down the road, not wanting to deal with the political fallout that will result if taxes are increased or benefits are reduced to fund future Social Security benefits. The last change Congress made was to gradually extend the full retirement age from the age of 65 to the age of 67 between 2002 and 2025.

Our Social Security system not only provides retirement benefits, but also provides disability and survivor benefits to covered workers and their families. The Social Security system receives funding from numerous sources, including the Social Security payroll tax (FICA) on wages, self-employment tax on the income of self-employed individuals, income tax on the taxable part of Social Security benefits, and interest on current trust fund assets.

In the Social Security Administration’s 2013 Annual Report, the Board of Trustees projected trust fund exhaustion by the year 2033. It also projected that in 2033, the first year of projected insolvency, the program would only have enough tax revenues to pay about 77% …Read More


Leave a Reply