To close the budget deficit for Social Security, suggestions to either lower benefits to save funds or boost revenue are frequently put up. Under any scenario, Social Security beneficiaries would likely start receiving lesser benefits in the coming decade; the reduction might be as well as 20% of what they are currently receiving.
75% to 80% of present Social Security payouts, as reported earlier by GOBankingRates, are paid for by payroll taxes made by both employers and employees. The remaining goes from the Old-Age and Survivors Insurance (OASI) Trust Fund, that, based on a current projection from the Congressional Budget Office, may be spent as early as 2032.
Payroll taxes would be required to pay for all Social Security benefits once the OASI budget is exhausted. As reported by the CBO, this implies that Social Security beneficiaries will see an almost 20% cut in payouts. Having some challenging choices about how to move forward is necessary to close the financing shortfall.
Alicia Munnell, director of the Center for Retirement Research at Boston College, stated to USA Today that “something needs to be done.”
