Cut benefits, increase taxes, or both?
This is not the ideal 80th birthday present for Social Security but at this point it could be very likely.
For much of its existence, Social Security has collected more than it has paid out, resulting in a large surplus of funds, which is currently valued at $2.8 trillion.
That is enough money to pay out retirement benefits as they are until 2035, but after that, Social Security would have to rely solely on the tax payroll, which is only about 79% of what is scheduled to be paid out. This means that retirement benefits would automatically be cut by at least 21%.