Latest news with #benefitcuts
Yahoo
14 hours ago
- Business
- Yahoo
How Likely Are Social Security Cuts? Here's the Latest Update.
The Social Security Trustees just moved up the timeline for the program's trust fund depletion date. Benefit cuts could now be on the table within a decade. Lawmakers have managed to prevent Social Security cuts in the past, but it's unclear to what they'll be able to pull off this time around. The $23,760 Social Security bonus most retirees completely overlook › Because so many older Americans rely heavily on Social Security to make ends meet, the idea of the program going broke is incredibly scary. Thankfully, though, that scenario is not on the table. Social Security can't run out of money, simply because it gets most of its revenue from payroll taxes. So as long as there's an active labor force, the program can continue to exist. That said, Social Security is facing a funding shortfall that could result in benefit cuts. And the timing of that shortfall just got a little worse. Even though Social Security is continuously funded by payroll taxes, in the coming years, as baby boomers retire in droves, that revenue stream is expected to shrink. And it won't provide Social Security with enough income to keep up with its payment obligations. Social Security can use its trust funds to keep paying benefits while the money is still there. But once those trust funds are emptied, benefit cuts will be on the table. Meanwhile, the Social Security Trustees just released their annual report, and it found that the program's trust funds may be depleted sooner than expected. That's not good news. The Old-Age and Survivors Insurance Trust Fund could be empty by 2033, at which point only 77% of Social Security benefits would be payable. The Disability Insurance Trust Fund could be empty by 2034. From there, 81% of the combined benefits would be payable by Social Security. But that's a pretty serious pay cut for seniors. As it is, many seniors struggle to cover their expenses on Social Security. If benefits are slashed, retirees could be in for a world of financial pain. This isn't the first time in Social Security's history that the program has faced the possibility of benefit cuts. And in the past, lawmakers have managed to come up with solutions for preventing them. But it's hard to say whether Social Security cuts will be preventable this time around. While there are potential solutions, each one introduces a different sort of problem. Some lawmakers have suggested raising the Social Security tax rate. Currently, that tax rate is 12.4% on wages up to a certain cap, split evenly between employers and employees (though self-employed people pay the entire 12.4%). Lawmakers could increase that tax rate, but that would clearly burden working Americans. It's also possible to raise or eliminate the Social Security wage cap so that higher earners pay into the program on more of their income. The problem, though, is that Social Security is designed to reward people who put more money into the program with larger benefits. If the wage cap is lifted and the program's maximum monthly benefit stays the same so there's a net financial gain, it changes the nature of Social Security. There's also the possibility of pushing full retirement age back a year or two. Right now, it's 67 for anyone born in 1960 or later. That change, however, could force many working Americans into a later retirement than what they want or can handle physically. The fact that Social Security is facing cuts in less than a decade demands lawmakers' attention. And at this point, it's a situation that needs to be prioritized. It's very possible to prevent Social Security from cutting benefits -- but only if lawmakers act quickly. Given what's on the line, we can only hope that they'll manage to beat the ticking clock and spare Social Security recipients a world of financial pain. If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known could help ensure a boost in your retirement income. One easy trick could pay you as much as $23,760 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Join Stock Advisor to learn more about these Motley Fool has a disclosure policy. How Likely Are Social Security Cuts? Here's the Latest Update. was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
16 hours ago
- Business
- Yahoo
How Likely Are Social Security Cuts? Here's the Latest Update.
The Social Security Trustees just moved up the timeline for the program's trust fund depletion date. Benefit cuts could now be on the table within a decade. Lawmakers have managed to prevent Social Security cuts in the past, but it's unclear to what they'll be able to pull off this time around. The $23,760 Social Security bonus most retirees completely overlook › Because so many older Americans rely heavily on Social Security to make ends meet, the idea of the program going broke is incredibly scary. Thankfully, though, that scenario is not on the table. Social Security can't run out of money, simply because it gets most of its revenue from payroll taxes. So as long as there's an active labor force, the program can continue to exist. That said, Social Security is facing a funding shortfall that could result in benefit cuts. And the timing of that shortfall just got a little worse. Even though Social Security is continuously funded by payroll taxes, in the coming years, as baby boomers retire in droves, that revenue stream is expected to shrink. And it won't provide Social Security with enough income to keep up with its payment obligations. Social Security can use its trust funds to keep paying benefits while the money is still there. But once those trust funds are emptied, benefit cuts will be on the table. Meanwhile, the Social Security Trustees just released their annual report, and it found that the program's trust funds may be depleted sooner than expected. That's not good news. The Old-Age and Survivors Insurance Trust Fund could be empty by 2033, at which point only 77% of Social Security benefits would be payable. The Disability Insurance Trust Fund could be empty by 2034. From there, 81% of the combined benefits would be payable by Social Security. But that's a pretty serious pay cut for seniors. As it is, many seniors struggle to cover their expenses on Social Security. If benefits are slashed, retirees could be in for a world of financial pain. This isn't the first time in Social Security's history that the program has faced the possibility of benefit cuts. And in the past, lawmakers have managed to come up with solutions for preventing them. But it's hard to say whether Social Security cuts will be preventable this time around. While there are potential solutions, each one introduces a different sort of problem. Some lawmakers have suggested raising the Social Security tax rate. Currently, that tax rate is 12.4% on wages up to a certain cap, split evenly between employers and employees (though self-employed people pay the entire 12.4%). Lawmakers could increase that tax rate, but that would clearly burden working Americans. It's also possible to raise or eliminate the Social Security wage cap so that higher earners pay into the program on more of their income. The problem, though, is that Social Security is designed to reward people who put more money into the program with larger benefits. If the wage cap is lifted and the program's maximum monthly benefit stays the same so there's a net financial gain, it changes the nature of Social Security. There's also the possibility of pushing full retirement age back a year or two. Right now, it's 67 for anyone born in 1960 or later. That change, however, could force many working Americans into a later retirement than what they want or can handle physically. The fact that Social Security is facing cuts in less than a decade demands lawmakers' attention. And at this point, it's a situation that needs to be prioritized. It's very possible to prevent Social Security from cutting benefits -- but only if lawmakers act quickly. Given what's on the line, we can only hope that they'll manage to beat the ticking clock and spare Social Security recipients a world of financial pain. If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known could help ensure a boost in your retirement income. One easy trick could pay you as much as $23,760 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Join Stock Advisor to learn more about these Motley Fool has a disclosure policy. How Likely Are Social Security Cuts? Here's the Latest Update. was originally published by The Motley Fool Sign in to access your portfolio
The Independent
a day ago
- Politics
- The Independent
Rebel MPs hit back at Starmer after suspension threat over benefits cuts vote
Labour MPs are preparing for a significant rebellion against Sir Keir Starmer's proposed £5bn benefit cuts, which include changes to Personal Independence Payment (PIP) affecting up to 800,000 people. Party whips have warned backbenchers who vote against or abstain on the measures face severe consequences, including potential suspension or being blacklisted from future government roles. Despite threats, around 50 Labour MPs are expected to vote against the bill, with many more planning to abstain, viewing the proposed cuts as "unprecedented" and "authoritarian." Charities like Sense and Mind have strongly criticised the reforms, warning they will push disabled people further into poverty and hardship, calling the cuts "horrendous" and "harmful." Work and Pensions Secretary Liz Kendall defended the reforms, stating they are crucial for the social security system's sustainability and represent a "new social contract."
The Independent
13-06-2025
- Health
- The Independent
Liz Kendall confirms changes to benefits bill as criticism grows
Work and Pensions Secretary Liz Kendall is set to introduce "non-negotiable" protections to the Welfare Reform Bill amid growing criticism over planned benefit cuts. The measures aim to reduce the number of working-age individuals receiving sickness benefits, potentially saving the government £5 billion annually by the end of the decade. The proposals include stricter eligibility requirements for the Personal Independence Payment (PIP) and reductions to the sickness-related component of Universal Credit (UC). Ms Kendall stated that additional protections will be added to the Bill to support the most vulnerable and help people affected by the changes, ensuring they are written into law and non-negotiable. Several Labour MPs have implored Ms Kendall to reconsider the plans, while charities and campaign groups warn that the reforms could push 250,000 people, including 50,000 children, into poverty.
Times
21-05-2025
- Health
- Times
Benefits reform is like fight for women's equality, says Liz Kendall
The work and pensions secretary has told Labour rebels she will press ahead with contentious benefit cuts, likening her reforms to get the long-term sick back to work to the battle for women's equality. Liz Kendall said she was 'listening' to concerns raised by backbenchers, hinting she was open to concessions on the implementation of reforms. But she refused to back down on the principle of cost-cutting, saying Britain could not afford a system where one in ten working age adults is on at least one sickness benefits and spending is still rising. Kendall argued there was 'nothing Labour' about ducking what she described as an economic and social crisis, pointing out that sickness benefit spending has risen by £20 billion a year since the
