![]() “Half of you don’t even yet have your 40 credits for eligibility. “You are too young to confidently guess how Social Security will pay benefits,” notes Mantell. Gen Z and millennials: Too early to tell – or worryĮxperts say it’s too early for millennials and Gen Zers to worry about Social Security cutting benefits. “You have time on your side, and every $1,000 or $2,000 or $5,000 you can sock away now will increase your income for retirement and balance out the trade-offs that you may have to make.”Īnd what’s the worst-scenario if you ramp up your savings and there’s cut in Social Security benefits? “You end up with more than you need,” says Elsasser. “You’ll be well-served to rethink, rebudget and redesign your spending and your savings strategy in case Social Security delivers less in income than currently projected,” she cautions. And that means you can and will need to ramp up your personal savings. ![]() ![]() The good news about this bad news? “For the 65 million of you who are between the ages of 41 and 56, you are in your peak earnings years,” says Mantell. If you were born 1965 through 1980, planning for your retirement income becomes more important than ever, warns Mantell.Įlsasser recommends planning on a 10% reduction in your Social Security benefits and doing retirement projection that includes a reduced Social Security amount to balance your lifestyle today with the lifestyle you’d like to live in retirement. ► Social Security: Why you should starting collecting benefits before 70 Gen X: Plan on a 10% reduction ► Social security quirks: Your birthday determines what day you get your check “Smaller cuts to your lifestyle sooner will hurt less than larger ones later.”Ĭovisum has a benefit cut calculator that allows consumers to identify how benefit cuts would impact their break-even ages. “If the cuts to your plan are too painful to bear if they do materialize, then make smaller changes now and monitor the situation,” he says. “Baby boomers should plan for benefits as they are projected, but stress test for a benefit cut,” he says. “Historically benefit cuts have been phased in over time.”įor instance, the last solvency crisis of this magnitude occurred in 1983. “And some of the reforms that were put in place are still being phased in today, such as the increase in full retirement age from 65 to 67,” Elsasser notes.Īccording to Elsasser, stress testing allows you to practice what you would change in your plan if the full cut materializes. ![]() Social Security benefit estimates for those born 1946 through 1964 should be on target and will be unlikely to be reduced if Congress fails to put a solution in place to shore up the reserve account within the overall trust fund, or fails to increase payroll taxes to support the commitments made to these retirees, says Mantell.Įlsasser agrees but suggest taking some precautionary measures. She agrees with Elsasser that Social Security beneficiaries and would-be beneficiaries ought to consider the following actions: Baby boomers: On target What to do then? “The implications with Social Security’s solvency tend to fall on generational lines,” explains Marcia Mantell, a principal with Mantell Retirement Consulting. But to date, there seems little to no interest on the part of lawmakers to tackle the coming shortfall between incoming revenue and scheduled benefits. What are some of those reforms? Tax increases, benefit cuts or a combination of both are the oft-mentioned reforms.
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