Just about every American expects to take advantage of Social Security to help make ends meet during retirement. But Social Security is in danger of not being able to pay full benefits in the future, and many fear future cuts to the program. What millions of Americans don't know, however, is that one cut is already slated to take effect in the future.
In the following video, Dan Caplinger, The Motley Fool's director of investment planning, goes through Social Security's coming cut. Dan notes that the cut comes in the form of an increase in the full retirement age, which will affect those born in 1955 or later. Currently, the full retirement age is 66, but for those born in 1955, the age will be 66 and two months, and every year after that, the threshold will rise another two months until reaching age 67 for those born in 1960 or later. Dan goes through the implications, noting that reductions for taking early benefits will jump from as much as 25% now to up to 30%. Benefits for delaying will fall, going from a maximum 32% now to just 24% after the new law takes effect.