"These days, there are plenty of rumors flying about Social Security going away completely. Thankfully, they're just rumors. But there's some truth behind them in that Social Security is experiencing a financial crisis lawmakers desperately need to address. Social Security gets most of its funding from payroll taxes. For this reason, the program is not at risk of going away completely."
"But benefit cuts are a huge possibility. The exact timing of potential cuts is subject to change and hinges on factors like how much revenue Social Security gets in the coming years and whether lawmakers agree to combine the program's two trust funds or keep them separate. But either way, it's a good idea to plan for Social Security cuts within the next 10 years."
Social Security receives most funding from payroll taxes, so the program is unlikely to disappear entirely. Benefit cuts remain a real possibility if revenues fall or lawmakers change the program's funding arrangements. The timing of potential cuts depends on future payroll-tax revenue and whether lawmakers combine or keep separate the program's two trust funds. People near retirement should plan for cuts within the next ten years and consider supplemental income sources. Exchange-traded funds (ETFs) can provide supplemental income, but investors must choose appropriate risk levels and funds with decent yields.
Read at 24/7 Wall St.
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