CRFB Warns 22% Social Security Cut Could Cost Couples Up to $22,300 in 2033

Q: Could delaying your retirement claims actually backfire if sweeping benefit cuts automatically trigger before you ever see your full payout?

Yes. If automatic Social Security cuts take effect before or soon after you claim, delaying could backfire in the sense that your higher scheduled benefit would still be reduced by the same across-the-board cut. Under current law, if the retirement trust fund is depleted around 2032 to 2033 and Congress has not acted, benefits would not disappear, but payments would be trimmed to the level supported by incoming payroll taxes. Estimates put that reduction at roughly 22% to 24%. That cut would apply broadly to retirees, survivors, and dependents, including people who delayed claiming to full retirement age or to 70. Delaying still raises your monthly benefit under today’s rules. Claiming at full retirement age gives you your full earned benefit, and waiting past that increases it by about 8% a year until 70. But if a trust-fund shortfall triggers automatic reductions, the cut would be applied to that higher benefit. In practical terms, waiting would still likely leave you with more than claiming early, but less than the full delayed amount you expected. That means the risk is not that delaying becomes pointless, but that it may not deliver the full protection many workers assume. The real danger is for people counting on every dollar, especially the 24.6 million seniors who rely on Social Security alone. For them, even a delayed and maximized benefit could still be sharply reduced if lawmakers do not close the financing gap in time.

3 articles · Updated · currently.att.yahoo.com · Aug 23

$22,300 a year could be lost by a dual-earning high-income couple at the start of 2033 if Social Security benefits are cut 22%, according to a new Committee for a Responsible Federal Budget analysis.
The same projected cut would trim annual income by $16,900 for a medium-income couple and $10,200 for a low-income couple, with average monthly losses per person estimated at $459 to $556.
The estimates stem from Social Security's looming trust fund shortfall, which could force roughly 24% across-the-board benefit reductions unless Congress acts to shore up the system.
About 24.6 million seniors rely on Social Security alone, the Senior Citizens League says, underscoring the stakes as senators push the Promise Act to force recorded votes on fixes.