Social Security's 3.6% COLA Bump Could Push the Program Toward a Funding Crisis
The program's current beneficiaries are anticipating a healthy payment increase in January -- but that boost will only further strain its diminishing Trust Fund.
Overview
The good news for Social Security recipients is that they appear to be on pace for a respectable 3.6% increase in their benefits early next year. The bad news is that this above-average rise in the program's payments raises the likelihood of a sizable reduction in everyone's future payments by 2032.
Here's what you need to know.
Details
For decades, American workers paid more total money in wage taxes into Social Security than it paid out in benefits. The surplus flowed into the Social Security Trust Fund -- a reserve intended to cover the shortfall that would occur after benefit payouts exceeded the program's revenues. That shift happened some time ago. And according to Social Security's Board of Trustees, by the end of 2032, the Trust Fund will be totally depleted.
Source
Originally published at www.fool.com.