MILLIONS of Americans eligible to receive Social Security benefits could be in danger of a benefit cut, leaving them at a $18,000 loss or more.
It also reveals that there is a costly mistake many claimants are making that sees them locked into getting smaller checks.
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Senior citizens across the US could lose up to 24% of their Social Security benefits in the coming years, according to a report by the Committee for a Responsible Federal Budget (CRFB).
This has to do with a few factors, but all seemingly have the same root.
The reason given for this thousands-worth deficit is due to the fallout from the One Big Beautiful Bill Act (OBBBA), which passed earlier this year.
Funds dedicated to programs funded by taxpayers, like Medicare and (especially) Social Security, are in danger of drying up by 2023 — or in seven years, per the CRFB.
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“We estimate that this would be equal to an $18,100 annual benefit cut for a dual-earning couple retiring at the start of 2033,” read the report.
Different factors can also figure into the overall deficit amount, whether or not couples have only one earner, and how what income they earn.
For instance, married taxpayers with only one breadwinner could end up with a $13,600 deficit, while high-income earners who both financially contribute to their household could face up to a $24,000 cut.
But as troubling as these predictions might be, another recent study suggests a true danger lies in how little Americans know about how Social Security works — or at what age to claim benefits.
Garden path to jeopardizing your SSI
Roughly 74% of Americans are unaware that they should wait a certain that age to claim Social Security to get the most out of it that they can.
This is despite those respondents asserted they are knowledgeable about the ins and outs of their benefits, according to findings from an extensive study released by AARP in July.
The minimum age requirement to claim Social Security is 62.
But out of 3,599 Americans over the age of 18 who were surveyed, approximately 66% had no idea an eight-year claimant gap could put retirees at a huge deficit during their golden years.
Claiming Social Security before you hit 70 means that beneficiaries nail themselves down to lower monthly rates.
This also can’t be undone: once you’re locked in, your monthly check amount is set at that rate for life.
Of course, the amount itself isn’t fixed.
For monthly checks, cost-of-living adjustments based on inflation are also factored in.
Even so, the difference between claiming Social Security benefits at, say 65, as opposed to 70, can be staggering.
If you lock in at 65 years old, you’re likely to receive nearly (and only) 87% of your full retirement age benefit, according to Fortune magazine.
If you wait until 70, you’re likely to receive 124% of your full retirement age benefit.
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