Social Security's Looming Crisis: A Decades-Old Problem Nears Its Breaking Point

Money Explainers

Social Security is on the brink of a major funding crisis, with benefits potentially facing a 25% cut. What led to this critical point, and what are the proposed solutions?  #SocialSecurityCrisis #RetirementSecurity #FundingShortfall

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00:00Social Security, a lifeline for millions, is facing a critical funding crisis.

00:05The program's combined trust funds are now projected to run out in 2034,

00:09a year earlier than previously thought. This means without intervention,

00:14retirement benefits could see a nearly 25% reduction in less than a decade.

00:18The system, primarily pay-as-you-go, has been drawing down its trust funds since 2021 as

00:24benefits began exceeding revenues due to demographic shifts. The recent Social Security

00:29Fairness Act, while beneficial for public workers, accelerated the depletion date by about six

00:34months. However, this is just a fraction of the average $330 billion annual shortfall over the

00:41next 75 years. For many, Social Security provides over half their income. Any significant reduction

00:48would be catastrophic. President Trump's proposed policies, including mass deportations, could

00:54worsen the situation by reducing the workforce contributing to the system. Claims of a waste,

01:00fraud, and abuse amounting to millions and millions of dead people receiving benefits have been debunked

01:05by his own Social Security Administration. The program is already lean, with 99.5 cents of every

01:12dollar going to beneficiaries. Republicans often propose cuts, including raising the retirement age

01:18and reducing benefits for high earners, but public opinion overwhelmingly opposes benefit reductions.

01:25Bipartisan solutions like raising the payroll tax cap and encouraging legal immigration, along with

01:30proposals to tax all income above $250,000 as seen in the Social Security Expansion Act, offer alternative

01:37paths to solvency and even increased benefits. The clock is ticking on a problem that is approaching

01:43both gradually and suddenly. Money explainers.

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