How Much Money Can You Expect From Social Security When the Trust Fund Runs Out
Good news: probably not zero.
As you’ve probably heard before, Social Security funds are expected to run out by 2037, leaving millions of us without a significant source of retirement income. In 2015, about 39% of the living expenses of American retirees were paid from social security funds.
Financial site The Motley Fool has good news and bad news, quoting the Seniors and Victims Insurance Trust Fund trustees (what we call Social Security):
Tax will be sufficient to pay only 75 per cent of the planned disbursements [when the Trust Fund is depleted]. This increase in cost is due to an aging population, not because we are living longer, but because the fertility rate has dropped from three to two children per woman. It is important to note that this deficit will mostly stabilize after 2035.
So, even if Congress doesn’t do anything to fix the welfare situation, you can still count on 75% of your calculated benefits. On the other hand, this is a 25% reduction. The average Social Security payment is $ 15,600 per year, so the decrease is $ 3,900 per year for the average family.
It is probably best not to rely on Social Security benefits when planning your retirement , although it might still be hoping they don’t disappear entirely.
What the average American’s retirement check will look like if reductions are made | Motley fool