It’s almost certain that Social Security will have less money available in about ten years compared to what it has today. The fund that supports this program, known as the Old Age and Survivors Insurance (OASI) Trust Fund, might run out of money as early as 2032 or 2033. To deal with this issue, some politicians have suggested Social Security benefit cuts. If this occurs, women are expected to be more affected than men.
Social Security Benefit Cuts
Yahoo reports that the Old Age and Survivors Insurance Trust Fund, which supports the Social Security program, is anticipated to run out of funds around 2032 or 2033. Once this happens, Social Security will rely entirely on payroll taxes for its funding, and these taxes only cover approximately 77% of the current benefits.
To address this looming financial issue, some lawmakers have suggested Social Security Benefit Cuts.
As of Dec. 31, 2021 — the most recent data available — the average Social Security payment for all retirees was $1,658.03 a month, according to the Social Security Administration, GoBankingRates reported.
Social Security benefits are determined based on your income during your 35 highest-earning years. Historically, men have earned more than women, even when they’ve held the same jobs. This higher income translates into larger Social Security payments when they retire.
Social Security Benefit Cuts Affects Women than Men
If the Social Security benefit cuts proposal becomes a reality, it’s expected that women will be disproportionately affected. This is because women already receive lower benefits, and any Social Security benefit cuts would only worsen this gender-based disparity.
While differences in gender pay and family roles have diminished in recent years, an income and career expectation gap still exists. Consequently, women who are still in the workforce are likely to receive smaller Social Security benefits on average compared to their male counterparts when they retire. This makes them more susceptible to the impact of Social Security benefit cuts.
Additionally, if lawmakers succeed in raising the full retirement age for Social Security, women could experience a more significant impact. In June, the House Republican Study Committee approved a plan to gradually increase the full retirement age to 69 for those who turn 62 in 2033.
Currently, the full retirement age varies, being either 66 or 67, depending on your birth year. For individuals born in 1960 or later, the full retirement age is 67.