Social Security payouts are about to be slashed — here's how much beneficiaries could lose

At a time when Americans are already struggling with the affordability crisis, they need all the extra cash they can get to make ends meet. But things could get worse for seniors if the Social Security benefits that they rely on are cut down. Retirees might see their monthly payments significantly reduced by the early 2030s because Social Security reserves are running dry. If the trust fund reserves run out, payroll taxes would only be enough to cover 77% of the benefits, according to a Newsweek report.

The report also stated that a person earning $2,000 per month from their Social Security would earn $1,540 in 2033 if the reserves run dry. That is a significant drop of $460. This potential insolvency crisis has been looming over the administration’s head for quite a while now. The reduced payouts would affect around 70 million people, including both seniors earning retirement benefits as well as those on Social Security Disability Insurance (SSDI) for monthly benefit payments, as per the report.

Those dependent on Social Security will also lose benefits and money for necessities like housing, medical bills, and groceries. It is up to Congress to make sure that funds are being deposited into the fund instead of areas where they might not be as necessary. Kevin Thompson, the CEO of 9i Capital Group, believes that the government would not allow payouts to be reduced, but the matter might not be seen with as much seriousness just yet.

"In no way do I expect Social Security to see a monthly benefit cut. The reality is simple: the people receiving Social Security actually vote, and they show up consistently. No politician survives arguing for cutting benefits to the most reliable voting bloc in the country. That makes this scenario highly unlikely,” he said, before clarifying, “At the same time, the government continues to spend aggressively in areas where the U.S. already leads the world by multiples, particularly military spending. Asking Americans to justify endless war spending while cutting support for their own citizens is not a tradeoff most people will tolerate over the long term.”

Social Security payouts may be a concern for the future, but the present isn’t doing too well either. President Donald Trump believes that Americans have to brace for another shutdown, only a few months after the country’s longest-ever government shutdown came to an end. Of course, he pinned the blame on the Democrats. “I think we have a problem, because I think we’re going to probably end up in another Democrat shutdown,” he said at the World Economic Forum in Davos.

“The shutdown cost us a lot, and I think they’ll probably do it again, that’s my feeling. We’ll see what happens,” the President added. The previous shutdown caused massive inconvenience and financial woes to the public as services and SNAP benefits were disrupted.

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