Cutting benefits
If the money offered by Social Security runs out by 2035, the benefit cuts can take many different forms. The simplest solution would be to cut all benefits equally, but a more ideal option would be to cut benefits based on income, because, thus, individuals with lower incomes will receive the same monthly payments. Taking a step forward, cutting benefits could take into account income but also other assets owned.
And now, to throw in some percentages, according to the annual report from 2020 mentioned above, it would be necessary to reduce the benefits by 19% for all recipients, ie including those who currently receive benefits. If the benefit cuts are made only for future beneficiaries, the percentage will increase up to 23%. The most worrying problem stands behind the 25% percentage that should be cut for all benefits if the necessary measures are not taken by 2035.
Starting from the average monthly retirement benefit of $1,503, a 19% drop would equate to $286 (or $3432 per year), while a 23% drop would cut $346 per month (or $4,152 per year).
