Social Security is facing a severe funding shortfall. (Photo: Yahoo Finance)
Washington needs to save Social Security since millions of seniors rely on it to make ends meet in retirement.
However, Social Security is facing a severe funding shortfall. The issue is that payroll taxes, which employees pay out of their earnings, are the program’s primary source of revenue.
Social Security can draw from its trust funds to pay scheduled benefits until those funds run out of money. The government must save Social Security; if not, benefit cuts are on the table, needing more funding to keep up with its obligations.
Lawmakers strongly oppose benefit cuts, fear they will lead to a national poverty crisis among the elderly. As a result, they’ve been floating various proposals to save Social Security’s finances.
READ ALSO: Do Social Security Payments Cease Now that Debt Ceiling Has Been Reached?
Social Security is facing a severe funding shortfall. (Photo: MSN)
Is raising the full retirement age for Social Security the right course of action?
Workers who pay into Social Security can collect monthly benefits based on their respective earnings histories at full retirement age or FRA. FRA is currently 67 for anyone born in 1960 or later.
Some lawmakers want to increase FRA. The Republican Study Committee budget proposes gradually increasing the FRA for Social Security up to the age of 70.
Filers might claim benefits earlier anyway
Some people may be concerned about being able to retire once they are 70 years old. If this proposal is approved, many new Social Security recipients may choose to begin receiving benefits before FRA, which is currently an option. This entails accepting a lower monthly benefit for the rest of your life. However, many people may be willing to take a financial hit to retire at a younger age. People are urging Washington to save Social Security as many are at a lost where to get their funds from once they hit the retirement age.
READ ALSO: Raising Social Security Retirement Age: Reconsidered
