How changes to Social Security projections could affect you

BUFFALO, N.Y. (WIVB) — If you or a loved one are planning to receive Social Security checks in the near future, the amount you receive may be significantly less in just a couple of years.

According to a recent report from the Social Security Board of Trustees, Social Security’s trust funds for old-age and disability benefits are now projected to run out by 2034 — one year earlier than previously expected.

“Twenty-seven percent of our population is solely reliant on Social Security as their only form of income,” said Kyle Lucey, a retirement planning specialist at Trinity Wealth Advisors in Williamsville.

While Social Security is primarily funded through a payroll tax and is not going away entirely, the updated projection factors in changes from the Social Security Fairness Act of January, which increased benefits and accelerated the expected depletion date.

Once the retirement fund is depleted, only 77% of the monthly checks that millions of Americans rely on will be payable. Lucey said this trend is driven by a combination of factors.

“This has really been driven by baby boomer retirements, increased life expectancy, and a lower birth rate in our country — meaning fewer employees are contributing to that trust fund,” Lucey said.

With just under a decade remaining to address the issue, U.S. lawmakers are exploring several potential solutions. These include raising taxes, cutting benefits, or making adjustments to eligibility.

“The first step would be to change the Social Security ages,” said Lucey. “Right now, the early Social Security age is 62 — that could be pushed back to 65. The full retirement age of 67 could be moved to 70. With increased actuarial life expectancy in the country, I think that could be a feasible target.”

He also suggested increasing the Social Security taxable income cap.

“It currently sits at $176,000,” he said. “Raising that would place more responsibility on higher earners to contribute to the Social Security trust fund.”

If Congress does nothing, benefits could be cut by at least 20%. However, Lucey says that scenario is unlikely.

Now more than ever is the time to start thinking about your finances — whether you’re young or old, he advised.

“Keep your finger on the pulse of economic changes, the tax code, and government policy, while also ensuring you’re saving for retirement during your working years,” he said.

Lucey added that this new projection places increased pressure on lawmakers to act before the situation worsens.

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