Social Security’s Funding Crunch Is Getting Worse
10th June 2024
ocial Security faces a potential funding shortfall by 2033-2035, threatening its ability to meet commitments to retirees. A significant issue is the payroll tax cap, which limits taxation to incomes up to $168,000. This cap hasn’t kept pace with the rise in high earners, contributing to the shortfall. Removing the cap could address 70% of the deficit. While raising the retirement age or increasing taxes are other options, the political feasibility of taxing higher incomes makes it a likely solution. Retirees are advised to continue investing in their retirement accounts to supplement Social Security benefits.
Only a fool depends on Social Security for their retirement. (If I had been able to put the money taken from me in Social Security tax and put it into an IRA, I’d be miles ahead.)