Anxiety Over Social Security Benefits Grows As Funding Cliff Looms

Key Points:

• Americans value Social Security but worry about its future as the Old-Age and Survivors Insurance Trust Fund is projected to run out by 2033, potentially leading to a 23% cut in benefits unless Congress acts.
• Experts suggest that political solutions will likely include modest tax increases, gradual raising of the full retirement age, and benefit reductions for high-income earners, while protecting current and near-term beneficiaries.
• Financial advisors recommend delaying Social Security benefits to maximize lifetime income and using lower-income years before claiming to convert retirement accounts to tax-free Roth IRAs, alongside investing in stable fixed-income securities like TIPS.
• The higher-earning spouse in a marriage benefits most from delaying Social Security claims, as survivor benefits allow the surviving spouse to receive the larger benefit, increasing household income longevity.
• Social Security administration staffing cuts have caused delays and difficulties for beneficiaries, especially for survivor benefits, and divorced seniors with qualifying marriages retain entitlement to benefits from ex-spouses, which some see as a subsidy for divorce.