Social Security was created to give a safety net for retired Americans. While it has kept many people away from poverty and provides life-saving financial help, the program has changed a lot – and many of those changes are bad. Here are three changes you might not have been told about that could ruin the value of your benefits.

1. Benefits now cut for most retirees

When Social Security was formed, the age of retirement was set at 65. This is the age you are allowed to get your benefits without penalties for collecting your benefits too early.

But this age is not 65 anymore. In fact, if you were born after 1943, your retirement age is between 66 and 67, depending on the year you were born.

This change happened when Congress changed the laws in 1983. But many are not really aware of it, because the retirement age was pulled-back slowly. Now, due to this shift, every person born after 1943 essentially got a benefit cut. They either need to retire later, or accept the penalties.

2. Lower buying power

The program has also changed in an even worse way. Social Security benefits have lost purchasing power. And the program’s routine raises have not kept pace with the inflation that retirees face on a daily basis. The calculations used to find the cost of living adjustments (COLAs) does not accurately track the fact that seniors spend a large part of their income on housing and healthcare, both of which rise faster in pricing than other types of spending.


The result is that your benefits have lost up to 30% of their value in only two decades. Sadly, because there was no new law that caused this, most don’t know about it.

3. The IRS is removing its cut

Your Social Security benefits are not taxed until your qualifying income hits a certain amount.

But the limit at which your benefits are taxable is not linked to inflation. This means as our incomes increase from inflation, a larger number of retirees will see they are now being taxed on their Social Security earnings.

Many seniors (as many as 50%) have already been hit with this problem, and the number grows every year.


Author: Steven Sinclaire

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