No. of Recommendations: 2
After 2033, Social Security could pay three-fourths of scheduled benefits using its tax income if policymakers took no steps to shore up the program.

Right. But how is that 25% shortfall going to be distributed among individual Social Security recipients?

Certainly a 25% cut to everyone is one possibility. That seems to be what you are assuming.

But there could also be means testing that leaves some with their full benefits and some with a cut much larger than 25%. I think that means test could include both income AND asset components. (Although I'd guess any asset test would have an exclusion for a primary residence.)

For planning purposes, I'd tailor the worst case scenario to the specific individual. For someone with little retirement assets or income other than Social Security, the worst case would be a 25% across the board cut in benefits. For someone with significant other assets and/or income, the worst case might be the 50% to 100% cuts some have mentioned.

--Peter
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