WMDT 47 NEWS – Currently, almost 58 million Americans receive social security benefits. In Delmarva alone, more than 14,000 people.
However, many of them are anything but sure of what the future holds. In 2014, there will only be a 1.5 percent increase in social security benefits due to stagnant consumer prices.
"Five or six years ago we had an increase that was over five percent," says Lester Simpson, a tax accountant in Salisbury, Maryland. "Generally most of the commentators say, we'll reduce the cost of living adjustment and save the government money, but reduce benefits for future retirees."
"It's not surprising that this is much lower than what we've seen in the past," says E, Tylor Clagget Jr., a professor of finance at Salisbury University.
If social security continues on this course, trust funds that support social security are projected to run dry in 20 years. According to the Associated Press, if this happens, social security would only collect enough taxes to pay about three-fourths of benefits. If Congress does not act, reports say benefits automatically would be cut by about 25 percent.
To prevent that, a new round of budget talks underway in Washington could produce proposals to change Social Security. One proposal up for discussion is replacing the current consumer price index with another option that calculates the cost of living. The Associated Press reports that 62 percent of Americans are opposed to this.
"It doesn't go up as fast as the traditional consumer price index does, therefore older Americans will be seeing smaller raises within their social security benefits," says Professor Clagget.
Another proposal includes increasing the retirement age, something that 58 percent of Americans are reportedly against. However, reports show that Americans were more willing to support social security proposals that would mostly impact those with higher incomes.
While most of the proposals are still just at the discussion stage, in the meantime, experts say that those collecting payments should start planning.
"It can be cranked into their budget about how much they plan to spend on the things that they normally spend," says Professor Clagget.
For future retirees, Simpson says that although not everyone is able to, if you can, to wait after retirement age to start collecting.
"Each year that you delay benefits, your benefit is increased by 8 percent," says Simpson. "They can have a substantially larger benefit in their eighties when they can no longer work."
"There's a whole host of things folks have to deal with when it comes to social security, but the main thing is to stay aware of the laws and the rules," says Professor Clagget. "Today most of those have to deal with what year you were born in."
Financial experts also say that social security is something that affects every person and married couple differently. Because of that, they recommend meeting with a social security representative to get answers before making any decisions.
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