How is social security in the US at risk of running out of funding, if every tax payer pays into it?
In: 1004
There are a few reasons:
1. The earnings limit for tax purposes is $160,200. That means if you make $161k or more per year you only pay taxes into social security for the first $160,200. Then you get a slightly bigger paycheck the rest of the year.
2. About 67 million people are receiving social security benefits with the average retirement check being just over $1,800 a month and disability being just over $1,400 a month. According to SSA, last year about $1.1 trillion was paid into the program while $1.232 trillion was paid out. As time moves forward the program will continue paying out more than it takes in.
3. Current projections show if nothings done to fix this then in 2034 the reserve will be depleted and beneficiaries may see a reduction in benefits as a result.
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