On Behalf of O’Malley Tunstall PLLC | Oct 21, 2021 | Social Security Disability
Social Security Disability is in trouble. Within 15 years, people who get SSD benefits will only receive 78% of the money they get now unless Congress does something.
Most people in the Raleigh and Tarboro areas can’t afford a 22 percent cut to their social security benefits. Thirteen years may seem like a long time from now. But experts say Congress needs to act quickly to keep save your benefits from dropping.
The problem is with the trust funds that pay for SSD and Social Security retirement benefits. The funds have been running at a loss for a long time. A report from the funds’ trustees says that unless something changes, they won’t be able to afford to pay everyone’s full benefits by 2034.
CNBC says there are three ways to save the trust funds. One, raise taxes. Two, cut benefits. Or three, some combination of both.
Ways to raise more SSD money
The Social Security Administration lets you earn a small income besides your SSD benefits. But if you make more than the limit, the excess is subject to federal income taxes. For example, take an SSD recipient who files taxes jointly with their spouse. If the couple reports between $32,000 and $44,000 in income, up to 50 percent of the person’s SSD check may be taxed. Congress could raise the amount of taxable benefits to get more money into the trust funds.
Or it could change the payroll tax that funds the system. Currently, only wages up to $144,800 gets Social Security taxes taken out. The law could be changed to include more taxable income. Another option would be to increase the Social Security payroll tax rate from 6.2 percent, which it is currently.
Finally, reducing benefits a small amount could prevent much bigger cuts in the future. We’ll have to see what Congress does about this problem.