A Social Security benefits cap proposal could change what SC retirees receive

A debate over the future of Social Security is taking center stage in Washington, D.C., as lawmakers and policy groups look for ways to strengthen its long?term finances.As reported by USA TODAY, in February, the Congressional Budget Office said it expected the Old-Age and Survivors Insurance Trust Fund, one of the two funds used to pay Social Security benefits, would run dry in 2032, a year earlier than budgetary analysis estimated.When the fund is depleted, Social Security recipients in South Carolina and across the United States could see an average 28% cut to monthly retirement and survivor benefits, the Committee for a Responsible Federal Budget, a non-profit “watchdog” organization that focuses on educating the public and policymakers about fiscal policy, said.Previously, the CRFB predicted a typical couple retiring just after insolvency would face an $18,400 cut in annual benefits.”Social Security has been on a path toward insolvency for some time – but over the past year, politicians have made its financial condition even worse,” CRFB wrote in its report.Here’s what South Carolinians need to know.Will the cap on Social Security benefits change?A final proposal calls for capping the total Social Security benefit retirees can draw in a year.AdvertisementRecently, the CRFB suggested capping benefits at $100,000 for couples, $50,000 for single retirees. That cap, indexed to inflation for future years, would close at least one-fifth of Social Security’s funding gap, the CRFB estimates.Critics warn, though, that a benefit cap could cut into middle-class benefits.The proposal is backed by the CRFB, specifically advocating for reducing the federal deficit and improving the long-term sustainability of the U.S. budget.This “Six-Figure Limit” is aimed at high?income beneficiaries to prevent the system from paying out exceptionally large benefits at the top end.How do Social Security benefits work?Social Security benefits are calculated based on a worker’s lifetime earnings, according to the Social Security Administration. Benefits are typically computed using “average indexed monthly earnings. This average summarizes up to 35 years of a worker’s indexed earnings.Lower?income workers receive a larger share of their earnings back through Social Security benefits than higher?income workers.Travis Jacque Rose is the trending news reporter for the Greenville News, part of the USA TODAY Network. Reach him at trose@gannett.com.This article originally appeared on Greenville News: Social Security funds dwindle. A cap change proposal help