CHICOPEE, Mass. (WWLP) – Social Security is on track to cut benefits to retirees in 2033, when its trust fund reserves are forecast to be depleted.
Those cuts could prove devastating to roughly 50 million older Americans who receive Social Security checks. The typical newly retired, dual-earner couple will see their Social Security checks reduced by $17,400 annually, or $1,450 per month, that’s according to the report from the nonpartisan Committee for a Responsible Federal Budget.
22News spoke with Financial Advisor Mark Teed from Raymond James Financial on how a cut like this could lead to many recipients debts not being payed. “At this level it would mean they couldn’t pay their electric bill, they couldn’t get their car payments done,” said Teed. “Little simple thing like groceries would be dramtically impacted.”
He adds a 6% or 7% inflation rate over 10 years could cut your lifestyle in half. Therefore, the anticipated $17,400 cut really amounts to about $35,000.
There are few options available to keep the program healthy like raising taxes, raise eligibility age, cut costs or rely more on general revenues to cover the gap in funding, which could mean higher budget deficits or potential cuts to other programs.