Social Security benefits are at risk of drying up years sooner than expected
The average American may need an additional $146,000 in savings to make up for potential losses
If Americans want to retire in peace, they may need to save a substantially more amount of money, given the precarious state of Social Security.
The nation’s trust fund for Social Security, initially projected to deplete by 2036, is at risk of running out of money four years earlier than expected due to the economic fallout of the coronavirus pandemic, per a report by the University of Pennsylvania’s business school.
In order to supplement this impending loss, the average American would need approximately $146,000 more in their savings to make up for the losses, according to the financial literacy website The Motley Fool.
READ MORE: Hillary Clinton says Trump plans to get rid of Social Security and Medicare
The federal Social Security Administration reported this past April that by 2034 just 76% of funds in the Old-Age and Survivors Insurance Trust Fund will be available for eligible senior citizens and retirees to tap.
The average monthly payout to social security recipients is $2,022. Accounting for the potential losses, those checks would come up about $485 shorter each month, accumulating to $5,800 per year, according to The Motley Fool.
CNBC reports that the massive jobs lost due to the coronavirus pandemic will cause the trust funds’ interest income to decrease. However, the SSA says that it is not possible to accurately calculate how the pandemic fallout will factor into the depletion of funds at this time.
READ MORE: 60% of Black households report ‘serious financial problems’ due to virus: study
Kent Smetters, faculty director of the Penn Wharton Budget Model, said that he expects the government will intervene.
“Congress presumably will use this information to act, to try to figure something out,” Smetters told CNBC. “But that is the path we’re currently on.”
Have you subscribed to theGrio’s podcast “Dear Culture”? Download our newest episodes now!
More About:Personal Finance News Lifestyle Finance
You Might Like
