Most Americans are unaware their Social Security benefits could be cut by a huge margin

Millions of Americans rely on Social Security in their old age to make ends meet. However, funds are running low, and unless Congress intervenes, it will likely be insolvent in six years. This doesn’t mean beneficiaries won’t get any Social Security money after six years, but they could face more than a 20% cut to benefits. While this is extremely alarming, many Americans aren't aware of how much it will impact them.

A report in Market Watch states that without Congressional intervention, a couple retiring at the start of 2033 could face an $18,100 annual benefit reduction. A Wharton Pension Research Council paper called for a public awareness effort to teach people about this predicament and how they can deal with it when the time comes. Unfortunately, such an awareness drive has several downsides to it as well.

There are questions over whether such a campaign can truly educate people about the impact of Congress not acting on Social Security. There are also concerns about people panicking and rushing to claim benefits as soon as possible, which could lead to a risk of greater insolvency and uncertainty. As per the report, a recent survey found that almost 2 in 3 adults don’t realize the impact of the Social Security trust fund running dry.

That said, as far as Olivia Mitchell, professor at the Wharton School at the University of Pennsylvania and executive director of the Pension Research Council, is concerned, a properly curated awareness drive might not lead to mass early withdrawals of Social Security money. “A responsible public campaign should be accurate, nonalarmist and behaviorally informed. A carefully designed campaign is unlikely to trigger a widespread rush to claim unless framed in catastrophic terms,” she explained, before adding, “It should be framed to help people make informed decisions, rather than instilling a crisis mentality.” However, Nancy Altman, president of advocacy group Social Security Works, believes that such an awareness campaign would be disastrous. She also believes that the more than 20% cut to benefits would not be allowed to happen, as the public would simply be outraged by it.

“The 23% cut will not happen, since it would cause mass outrage. Who would vote to re-elect a member of Congress who stood by and let benefits get slashed by 23%?” she said. There is also the matter of how different sets of people would take the news. Beth Egan, associate professor of advertising at Syracuse University’s S.I. Newhouse School of Communications, believes that getting awareness through to the entire American population could be a challenge. “They’re all very different messages and getting them told clearly could be a challenge,” she said. “What we do know about the country today is that people may be challenged to believe it’s truthful. It could be seen by some as a fear-mongering message. Like it or not, it may come across as a political message.”

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