A recent analysis estimates a 24% reduction in Social Security benefits by late 2032, translating to a potential $18,000 annual cut for couples retiring in 2033. The analysis also indicates a possible 11% reduction in Medicare hospital payments, leading to decreased healthcare access. The Social Security trust fund, historically solvent, began tapping reserves in 2021 and is projected to deplete during the 2030s. Legislative tax cuts are expected to further reduce incoming revenue, accelerating the fund's depletion.
The new analysis projects a 24% cut to benefits by late 2032, equal to an $18,000 annual benefit cut for a dual-earning couple retiring in 2033.
An 11% cut in Medicare hospital payments could result in reduced healthcare access for retirees as the population ages and fewer young Americans contribute to the system.
The trust fund, relying on Social Security taxes, began withdrawing reserves in 2021, and will eventually operate on a pay-as-you-go basis, depleting in the 2030s.
Tax cuts and increased deductions in recent legislation are expected to decrease Social Security’s incoming tax revenue and hasten the depletion of the fund.
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