Where Would You Adjust If Your Retirement or Survivors Benefits Were Reduced?

[GailL1]

Come 2033, we may all have a chance to find out - That’s what the 2025 Social Security Trustee Report is telling us - and it has been telling us this for the last 15+ years even though the date wobbles a few years from 2032 - 2035 between the annual reports.

SSA.gov - 2025 Social Security Trustee Report Summary  

from the link ~ 

Based on our best estimates, this year's reports show that:

• The Old-Age and Survivors Insurance (OASI) Trust Fund will be able to pay 100 percent of total scheduled benefits until 2033, unchanged from last year’s report. At that time, the fund’s reserves will become depleted and continuing program income will be sufficient to pay 77 percent of total scheduled benefits

And the Conclusion is always the same (again from the link )

Lawmakers have many options for changes that would reduce or eliminate the long-term financing shortfalls. Taking action sooner rather than later will allow consideration of a broader range of solutions and provide more time to phase in changes so that the public has adequate time to prepare.

“.. . so that the public has adequate time to prepare.“    

The public means everybody - 

• the current beneficiaries of Social Security Retirement or Survivors benefits,
• the beneficiaries that will begin to draw benefits in the immediate future and after
• those still working and contributing to the program - employees and their employers or the self-employed
• those receiving or would be receiving some auxiliary benefit that could be modified as an adjustment to the program.

To tell you the truth, folks, I am not sure that this is a problem that our, current or up and coming, legislators can even solve anymore - just too much division, stubbornness, selfishness, job protection, different points of view in the mix for them to ever be levelheaded and do some compromising anymore.

It is gonna take a lot more than just one fix to make the system healthy again.

We have added and added benefits through the ages without an offset to incoming contributions.  We want what seems to be our just due and many times get it.  Because of tech advances, we have lost workers replaced by machines.  For whatever reason, we have decided that we need to cut down on having the # of kids like we once did. 

I probably will not be around for whatever the hopefully, good outcome to this might be - It was fixed once during my lifetime - maybe it will be again.  

Your outlook?

[Tonster521]

 @gail1, I have read your posts over the years and you have provided pertinent information regarding the status of the SS program (including SS Benefits and Medicare). You have included various solutions from different Senators (i.e, Larson, Sanders, etc.). However, Congress is the decision maker with the SS program and they have done nothing. It appears to me that Congress will continue to kick the can down the road until reducing SS Benefits is inevitable (maybe 2033 or earlier). This was the scenario in 1981 when President Reagan created the  National Commission on Social Security Reform (aka Greenspan Commission). The Commission included 15 members and were non-partisan. Their assignment was to develop solutions for the SS program of which the SS Trust was projected to reach zero ($0.00) by August 1983. The Commission created a number of Recommendations which became the basis for the 1983 SS Amendments that only resolved the short term financing problems. https://www.ssa.gov/history/reports/gspan.html I believe it will take a Commission or whatever one wants to call the group so Congress can rely on (use) to avoid the political "third rail" which is increasing SS taxes. Take a look at Chapter Four (4) - Additional Statements wherein 8 Commissioners supported cutting SS Benefits by increasing the Full Retirement Age from 65 to 66 to 67 and 5 Commissioners supported increasing SS taxes (FICA payroll by about .046% payable by workers and employers to begin around 2010. As we know, the FRA was increased, but there was not any increase in SS taxes. It was estimated that the Recommendations by the Commission would only resolve about 66.7% of the funding shortfall. So, 33.3% of that 75 year plan was never addressed by Congress and their boss, the Presidents, since 2010. It is funny how mathematical the issue is true, For example, 75 years starting 1984 will cover time through 2058. However, only 66.7% was addressed or 50 years. Depending if you count from the beginning or the end of a calendar year, that will only get us to approximately 2033. Talk about "being in the ballpark", certain Commissioners were "in the infield".

[jimc222]

You make people who worked a second job sound like criminals receiving unfair payments from SSN. Let me tell you for the last 6 years and 5 years respectively prior to 2024 Social Security has withheld approximately 2/3 of what should have been paid to us and then being taxed on the 1/3 that was distributed. The Fairness act was only right in restoring what was our investment. That was to the tune of around $54000 over that period. Now you say the system is going broke -- thanks to politicians who can't add or even worse can add but find a way to reduce that value of the invested fuds.  As I recall this organization leadership spouted the merits of this administration now find that everything that was promised about Social Security was a lie. Thanks for nothing.

[Tonster521]

@jimc222, I am not sure who you are directing you reply too. Are you replying to GaiL1? To the AARP powers to be? To all AARP Forum participants? At any rate, it appears you are receiving a government pension due to Non-covered Employment. In other words, you have not paid FICA taxes on your Earnings from Non-covered Employment. Moreover, your government Employer has not paid their share of FICA taxes as well. Both of those amounts are significant. For example, if you worked 30 years in Non-covered Employment and earned $1,500,000 during that time, you and your employer did not pay $186,000 in FICA taxes ($93,000 each). If you earned $2,000,000 during that time, you and your employer did not pay $248,000 in FICA taxes ($124,000 each). I think you understand the math. It is 6.2% (.062) of your earnings paid by both worker and employer. For purposes of simplicity, I have used average earnings. Of course, if your earnings were greater, you and your employer's FICA taxes would be greater as well. I did not include the Medicare Payroll Tax since you and your employer may have paid that tax (1.45% or .0145). It should be noted that if you were covered by the Civil Service Retirement System (CSRS) prior to January 1, 1987, you had the option of remaining covered by CSRS or opting into the SS program and the Federal Employees Retirement System. If you were not covered by the CSRS, but worked for a State or Local government entity that did not opt into the SS program (i.e., school districts (teachers), some police, some fire departments/districts, etc.) your retirement program includes a benefit that is equal to or greater than any SS Benefit based on such Non-covered Earnings. I suggest that you read Recommendations 6 and 7 of the National Commission on Social Security Reform (aka Greenspan Commission) that I included as a link in my reply to Gail1 dated June 29, 2025. FYI, the Greenspan Commission's recommendations were the basis for the 1983 Amendments to the SS Act of which many became effective in 1984. If you read recommendation 6, you will see the Greenspan Commission's reason for developing a "fair" SS Primary Insurance Amount (PIA) calculation for the folks who worked most of their careers in Non-covered Employment. Prior to the 1983 SS Amendments, those folks who worked the appropriate number of quarters in Covered Employment after separating from service in Non-covered Employment were being paid SS Benefits as if they were low paid workers (think minimum wage). The PIA formula paid most of their SS Benefit at the 90% Bend Point because the SS system did not have any record of their Non-covered Earnings. The 90% Bend Point is used to develop a SS benefit to keep beneficiaries above the poverty level. The 90% Bend Point was not there to provide a "windfall" (enrich) folks with Non-covered Earnings. FYI, most Workers in Covered Employment must work 35 years and can elect reduced SS benefits at age 62 unless disabled.

Additionally, if you elect to do so, there are provisions in the SS Act (Section 218 Agreements) that you should review as well. Many government entities have Section 218 Agreements with the SSA. Those entities may have determined that it is more efficient to provide a SS Benefit for their workers.However, some government entities do not elect to participate in the SS Benefit provisions (i.e., Old Age (aka Retirement), Survivor, and Disability Income) and provide equal or greater benefits at their State and Local taxpayers expense (i.e., state income taxes, property taxes, sales taxes, etc.).

Lastly, the SS program is not an investment. You do not have an account such as an IRA, 401 K, 403 B, etc.) wherein you makes contributions that earn interest/dividends. Our SS Benefit  is called an insurance benefit program which is closer in definition to welfare benefits such as unemployment compensation. It is not a pension wherein you have a contractual right or legal right pursuant to ERISA to a vested benefit. The Supreme Court has already established that ruling years ago. In short, our SS Benefits may be subject to change and even termination at the whims of Congress. The recent change (Fairness Act) now provides you a "windfall" since most of your SS benefit is calculated at the 90% Bend Point that for the last 40 years has been preserved for the low income folks to keep them above poverty (also think mothers and widows returning to the workforce). Even though the treasury pays you via the SS benefit program, you are receiving Workers' taxes paid over 35 years or more and not government money for the taking. I strongly support paying the appropriate SS Benefits to all Workers. However, in your case, I will guess that you will owe anywhere from $100,00 to $200,000 or more in FICA Payroll taxes based on Non-covered Earnings. BTW, you are required to pay federal income taxes on up to 85% of your SS Benefits because your taxable income exceeds the thresholds established by Congress. 

[papawofboo]

I think you are right about the way things are in DC. I read somewhere that no one cares about the whole nation, just the part of the nation that is in their party.

Like you I don't know if I have that many birthday candles left in me. I guess my first cut would be my cable bill, no telling how high it will be by then. Go to one phone. If both cars are still running, get rid of lesser. Food would have to take a cut, use what you buy and quit with the waste. Plan your trips better and not use more gas. I reckon just do a better job of what I am trying to do now.

What I want AARP to do at the next national elections is get every candidates thoughts on SS and MC. Make them answer the hard question, not with a lot of mumbo jumbo words but with clear simple words. Put the answers in here and poll us for the best person for the job. Then we as a group need to vote in a block. Forget about the mule and elephant think in terms of birthday candle.

I don't care if they have 3 ears, 14 fingers and 7 toes, vote for the person with the best plan.

And we both know it's not happening.