With the latest news that the Social Security Trust Funds’ insolvency may be coming sooner than expected, it is no surprise that many seniors are anxious about their financial security.
Social Security benefits make up a large portion of the average retiree’s income. When even a small percentage of it is taken away, some are forced to find other ways to make up for the loss. And even though not all seniors depend on their benefits – they earned them.
However, there are additional obstacles that stand in the way. Including the large obstacle that is the income threshold.
Income Threshold: What Is It?
The income threshold is the total of earnings retirees can earn before getting additional taxes added on to their benefits.
For 2021, the income threshold for those under the full retirement age (FRA) is $18,960. For every $2 over this limit retirees earn, $1 of their benefit payment is withheld.
This can force seniors to do complicated math just so they can feel financially secure. And, if this wasn’t headache-inducing enough, once Social Security’s Trust Funds deplete, things are likely to become even more complicated.
How Social Security Insolvency Will Affect Retirees
With Social Security’s insolvency, seniors will still be receiving benefit payments. However, these payments will be reduced. In fact, it is likely only 76% of scheduled benefit payments will be available to pay retirees.
Due to this reduction, seniors will be forced to make additional earnings just to meet their previous benefit payments. However, with the income threshold remaining, these earnings don’t go quite as far as they should.
We’re Working to Pass Desperately Needed Legislation
Fortunately, Senior Security Alliance is urging Congress to pass a solution. Our groundbreaking bill provides retirees with seven guarantees that help ensure more financial security.
With this bill, seniors would not need to worry about the tedious number-games the income threshold enacts. Instead, the bill guarantees retirees receive their benefits, regardless of any extra income earned.
For more information, or to learn how you can help ensure our bill gets passed, check out our page here.
