If Plan A in your retirement scheme is Social Security, it’s time to start working on Plan B.
Based on reports last week from the folks responsible for the Medicare and Social Security Trust Funds, Americans—especially those under age 40—need to reconsider their retirement plans.
Absent major action by lawmakers, the annual reports say the combined assets of the Old-Age and Survivors Insurance and the Disability Insurance trust funds will be exhausted in 2033—three years sooner than was projected last year. The Disability Insurance fund will be exhausted in 2016, two years earlier than last year’s estimate.
Come 2033, just 21 short years from now, Social Security will pay just 75% of scheduled benefits, just 75 cents on the dollar. So, instead of getting, say, $1,000 per month from Social Security, you’ll get $750 per month come 2033.
The trustees forecast that Medicare’s hospital insurance fund would begin to run out of money beginning in 2024.