Millennials can expect a 20% cut in Social Security benefits when they start claiming their payments, according to a new report.
This could cost future retirees up to $675,000 benefits Lifelong, until there are improvements.
Monthly payments are currently expected to be cut through 2034 as trust funds are depleted, unless Congress takes action.
If benefits are reduced by 20%, in 2022 the average 35-year-old millennial earning $50,000 would receive $13,500 less in annual social Security Income in the first year of retirement.
If they survive to age 87, that equates to $365,000 less in lifetime benefits.
Additionally, if a person earns $100,000 or more in 2022, Social Security benefits will be reduced by between $21,000 and $25,000 in the first year.
That’s somewhere between $560,000 and $675,000 in profit lost over a lifetime.
However, reports suggest that the SSA faced similar challenges in the past, but legislators made policy adjustments.
how to make up for the loss
While the findings aren’t great news for people in that age group, Social Security won’t be eliminated entirely.
Those who want to archive at the right time will just need to plan better.
According to the report, a 35-year-old earning $50,000 in 2022 would currently expect to receive about $1.8 million in lifetime Social Security.
However, after a potential 20% reduction, this would reduce benefits by about $365,000 — or more than $17,000 per year during retirement.
The data shows that future Social Security benefits can be offset with a consistent annual increase in savings.
A 35-year-old earning $100,000 should strive to add $2,543 to his annual savings from now until his full retirement age.
The extra cash, which amounts to about $211 a month, would then offset the reduction in Social Security benefits.
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