Free Calculators Help You Plan Ahead for Cuts to the Program — How They Work


Ridofranz/Getty Images/iStockphoto

Despite what you may have heard, Social Security is not going to run out of money for the next decade. But under the current system, the program’s reserve trust funds are expected to be exhausted by 2035, meaning that its main source of funding – payroll taxes – will cover only about 78% of benefits in subsequent years.

See: 6 Social Security shakeups expected in the new year
Search: 5 things to do when your savings hit $50,000

This likely means that younger people working today will see a reduction in Social Security benefits compared to what is being paid today. As previously reported by GOBankingRates, if you are under 45, you can expect to see your Social Security benefits reduced by 10% to 15% from current levels. That percentage drops to 5% for 45 to 60-year-olds.

If you want to get an idea of ​​what your monthly Social Security payment might be when you sign up for retirement benefits, the Social Security Administration offers some resources on its website. However, these are based on current Social Security funding and do not take into account potential road cuts. For that, you can check out third-party calculators for free.

As CNBC reported, one of those calculators is offered by Covisum, a provider of Social Security claiming software. It recently updated its calculator to reflect the latest projections from Social Security administrators — including a free version for consumers and a more complex paid version for financial advisors.

With the free version you can calculate, among other things, the effect of a 22% reduction on the benefit from 2035 and the effect of no reduction on your benefit. This applies to different scenarios when you plan to retire.

If you want to use the SSA’s free tools, a good first step is to create a My Social Security account online. With this account, you can verify your career earnings, get your Social Security statement, and access various calculators to help you plan for the future.

The calculators can help you estimate retirement benefits at age 62, full retirement age (66 or 67, depending on your date of birth), and age 70. Theoretically, you could take that figure and then reduce the amount by 5% to 15% from the beginning in 2035.

You can also view retirement benefit estimates by:

  • Choose a future age to receive retirement benefits in years and months or use the “Age” slider.

  • Choose a future date to receive retirement benefits

  • Enter the average annual income you expect to earn until retirement

Live Richer Podcast: Unexpected Ways Losing a Spouse Can Affect Your Finances and Retirement
Biden on Social Security cuts: ‘I won’t do that’ – what are his options?

Another option is to use the SSA Quick Calculator, which provides benefit estimates based on information you provide, such as your date of birth, income in the current year, and expected retirement date.

More from GOBankingRates

This article originally appeared on Social Security: Free Calculators Help You Plan Ahead for Program Cuts – How They Work

The Valley Voice
The Valley Voice
Christopher Brito is a social media producer and trending writer for The Valley Voice, with a focus on sports and stories related to race and culture.


Please enter your comment!
Please enter your name here

Share post:


More like this

RSCIT Admit Card 2023 आरएससीआईटी एग्जाम 22 जनवरी 2023 एडमिट कार्ड जारी

RSCIT Admit Card 2023 आरएससीआईटी एग्जाम 22 जनवरी 2023...

Market Rally Pauses, Tesla Jumps, Moderna Pops Late; What Investors Need Now

Dow Jones futures fell slightly after hours along with...