Is My Social Security Going To Get Cut in the Future?

·3 min read

In the future, with all the Social Security problems, if we are collecting Social Security, what are the chances that they will decrease the payment to those already collecting? 

– Jeff K.; McDonough, Georgia

Hi Jeff,

I completely understand why you fear your Social Security payments will be reduced, or possibly eliminated entirely. The Trustees of the Social Security and Medicare trust funds reports that “The Old-Age and Survivors Insurance (OASI) Trust Fund will be able to pay 100 percent of total scheduled benefits until 2033.” So what happens when we get to 2033? I asked a few experts to get their takes on what the future of Social Security holds.

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Ric Edelman, an investor and author, predicts that your Social Security benefits won’t get reduced outright, but you may have to pay more taxes on them.

“Democrats want to raise taxes. Republicans won’t agree to that unless there are cuts to the program. These cuts are likely to come in the form of taxes on benefits – which has better optics than straight-line benefit cuts,” he said. “They could cut benefits [by] 10%, or they could tax benefits at a rate sufficient to equal a 10% clawback of benefits; you get to the same result, but politically, it appears to be a tax rather than a cut in benefits.”

I also spoke with Bryan Kuderna, CFP and author of “What Should I Do With My Money?”, and he has a more optimistic outlook — he doesn’t think your benefit payments will be affected.

“For those already collecting Social Security, I would not be at all worried that your benefits will decrease in your lifetime,” he said. “As the top source of retiree income in America, politicians on both sides are weary of altering the program and jeopardizing those votes.”

However, your kids (or other family members from younger generations) will likely not get the same benefits you are getting.

“Future generations will likely retire in a different system, perhaps collecting at later ages indexed for life expectancy,” Kuderna said. “Current retirees – at worst – could face higher income taxes on their Social Security benefits, and maybe pausing or reducing COLA increases will get debated, but don’t expect a reduction in existing benefits.”

Another expert I spoke to, Martin Neil Baily, a senior fellow emeritus at the Brookings Institution, also doesn’t think you have anything to worry about.

“There is no chance they will cut benefits for current recipients,” he said. “[It] would be political suicide.”

Baily believes the best solution going forward would be to “make modest cuts in future benefits for high-income households and to make modest increases in the FICA tax.”

“It is a solvable problem if both sides would only give a little,” he said.

So, while I don’t have a crystal ball, the experts seem to believe that your Social Security benefits will remain intact for the rest of your life. I hope that brings you a little more peace of mind!

See: 6 Types of Retirement Income That Aren’t Taxable

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I am over 50 years old, so if I max out my 401(k) at work to $30,000 in 2023, how much more money can I add to my retirement savings in my work Roth 401(k)? (I also contribute $7,500 to my regular Roth IRA account.)


Hi Tom,

First of all, congratulations on putting so much money away for retirement! As you near retirement, it’s definitely a good idea to be contributing as much to these accounts as possible — but you may already be at your limit.

I spoke with Ben Peters, CFP, J.D., a lead advisor at Burton Enright Welch, to get his expert insights, and he told me that you can’t add more to 401(k) plans for the year beyond the $30,000 limit, but you may be able to make a $7,500 non-deductible IRA contribution, which can be converted to a Roth IRA.

“This backdoor Roth approach would be advisable if there are no pre-tax IRA dollars in his world, so the conversion is completely tax-free,” he said. “Beyond those buckets, there are no other tax-advantaged retirement buckets he can add to, unless he happens to have self-employment income.”

Jaime Catmull contributed to the reporting for this article.

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