Social Security could be cut by $500 monthly in 2032, a new report claims. Here's how to boost your savings before that happens.
Summary
A new report warns that Social Security benefits could be cut by up to 24% in 2032 if the retirement trust fund runs out of money, which might reduce monthly payments by about $500. To prepare, people are advised to consider saving money in accounts that offer higher interest rates, such as certificates of deposit (CDs), high-yield savings accounts, or money market accounts.Key Facts
- Social Security’s retirement trust fund may become insolvent by 2032.
- This could lead to a 24% cut in monthly Social Security benefits, about $500 less per month.
- The cut would impact 10% to 23% of Social Security recipients in each state.
- The possible cut would erase any cost-of-living adjustment expected this year, which is estimated at about 4%.
- Inflation and higher borrowing costs already strain many Americans’ budgets.
- Savers can earn around 4% interest by using certificates of deposit (CDs) with fixed rates.
- High-yield savings accounts offer competitive but variable interest rates with easy access to funds.
- Money market accounts provide about 3.9% interest and allow check writing for spending flexibility.
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