While the projection may sound alarming, Joseph Eschleman, president and founder of Towerpoint Wealth<\/a> in Sacramento, said it does not mean Social Security payments would stop entirely.<\/p>\n
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\u201cBecause 80% of Social Security is being funded through payroll taxes, the whole Social Security system is not facing insolvency,\u201d Eschleman said.<\/p>\n Instead, the depletion of the retirement trust fund would result in reduced benefits for recipients. According to the report, benefits would be automatically cut by 24% upon trust fund depletion.<\/p>\n That reduction could mean a loss of about $500 per month for some Social Security recipients.<\/p>\n \u201cThere is no painless solution, right? There is a solution. I’ll say that’s good news, right? It’s going to be painful for probably most recipients of Social Security in one way, shape or form,\u201d Eschleman said.<\/p>\n The report also moved the projected depletion date forward by about three months compared with last year\u2019s forecast.<\/p>\n Eschleman said the findings underscore the importance of personal retirement planning in addition to Social Security benefits.<\/p>\n \u201cThere is more of a personal responsibility that we now have to be prudent, pay ourselves first, maximize how you’re saving and investing for your own retirement, to be able to have enough of a pool of money or a portfolio, to which Social Security can then complement to derive an appropriate retirement income stream,\u201d Eschleman said.<\/p>\n The findings could increase pressure on lawmakers to address the program\u2019s long-term financial challenges.<\/p>\n \u201cThere\u2019s still time to be making these adjustments. It’s just a matter of how they’re going to solve for it,\u201d Eschleman said.<\/p>\n If Social Security becomes insolvent in 2032, a report from the Committee for a Responsible Federal Budget<\/a> projects California would rank first in the nation for total benefits lost, with more than $33 billion in lost benefits and 6 million residents affected.<\/p>\n The report estimates the average California retiree would see a monthly benefit reduction of about $490.<\/p>\n
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\n Social Security trust fund projected to deplete in 2032, putting benefits at risk
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