Based on recent reports and analyses, the Social Security trust funds will begin to run out of money by 2035, but this is one year later than previously forecast due to increased wage growth and low unemployment rates. However, if no action is taken by Congress, seniors can expect a 17% reduction in benefits. While the projections combine the Old Age and Survivors Insurance (OASI) Trust Fund and the Disability Insurance (DI) Trust Fund, the OASI fund is projected to be depleted by 2033 on its own. To alleviate concerns about the financial health of the trust funds, Social Security Commissioner Martin O’Malley urged Congress to take action to extend the fund’s financial health into the future, similar to previous bipartisan efforts.
In terms of personal finances, U.S. adults believe they will need significantly more to retire comfortably than in previous years, with the Northwestern Mutual survey indicating a required amount of $1.46 million. This figure represents a 15% increase from last year’s estimate and surpasses the five-year high set in 2021. However, the average amount saved for retirement has decreased, dropping from $89,300 in 2023 to $88,400 in 2024.
Gen Zers, in particular, have larger retirement goals, requiring $1.6 million to retire comfortably. They also anticipate retiring earlier than previous generations, by age 60. By contrast, a recent Nationwide survey revealed that many people nearing retirement age feel it’s impossible to stop working at age 65 due to challenges faced during retirement. As a result, 41% plan to keep working in retirement to supplement their income out of necessity, while 27% are cutting back on spending to fund retirement goals.
To manage debt and lower monthly expenses, individuals can use a personal loan to pay off high-interest debt at a lower interest rate. Credible offers a platform where users can compare options from multiple lenders at once and select the best option for their needs. Additionally, if an individual is retired or approaching retirement age, paying down debt with a personal loan can help reduce interest rates and monthly expenses.
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