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On the other hand, about half of retirees are currently not paying taxes on their benefits due to low provisional income levels. If taxes were eliminated, the most substantial financial relief would impact medium to higher-income retirees, as lower-income individuals are already exempt.
Challenges Facing the Social Security Trust Fund
A pressing concern lies in the health of the Social Security Trust Fund itself. Projections indicate that the fund could be depleted by 2034 if no reforms are enacted. Though benefits would still be paid out based on current worker contributions, retiree benefits could experience a reduction of around 20%.