Examining the Future of Social Security, Medicare, and Your Taxes SHP Financial

The Social Security trust fund is now expected to be depleted by 2034, according to a recent report from the Social Security and Medicare trustees.[1] That’s one year earlier than they reported last year, and the pandemic is to blame. Less was collected in payroll taxes when unemployment was high, and more people claimed benefits. Although this information may seem like a death sentence for the program, the truth regarding the future of Social Security, Medicare, and your taxes may be more complex.

Social Security and Medicare

Once the Social Security trust fund runs out, payroll taxes will be able to cover about 78% of promised benefits. The Medicare Part A trust fund is expected to be depleted by 2026, at which point the program would take in enough to pay out 91% of promised benefits.[2] Since Social Security and Medicare support so many Americans and are so popular, it’s unlikely that the government will allow them to go broke. Instead, we could see adjustments as well as increased taxes to help fund these programs.

Could We See Higher Taxes in the Future?

You should know the types of retirement income and how they’re taxed. High net worth retirees may see tax increases in many forms. In the near future, we could see the top marginal income tax rate go from 37% to 39.6%, and the long-term capital gains rate of 20% for gains of over $1 million disappear. This means that capital gains would instead be taxed at 39.6%, plus the additional 3.8% Obamacare tax.

Many retirees do not realize that their Social Security benefits can be taxed. If your combined income as an individual is between $25,000 and $34,000 or is between $32,000 and $44,000 as a married couple filing jointly, up to 50% of your benefit may be taxable. And, if your combined income as an individual is over $34,000 or over $44,000 as a married couple filing jointly, up to 85% of your benefit may be taxable.[3] These income thresholds have not increased since they were first instituted in 1984.[4]

Taking Control of Your Retirement Finances

We could see changes to Social Security, Medicare, or increased taxes in the future that may impact how much you receive or how much of your money you get to keep. It’s important to remember that your retirement finances are in your hands, and you can take control of your financial future. You can do this by working with a professional to create a retirement investment strategy, Social Security maximization strategy, and tax minimization plan.

Make planning for your retirement a priority no matter how many years away you are or if you’re already retired. Click HERE to schedule a time to talk with one of us at SHP Financial, about how to plan for whatever the future may hold. We can look at your specific financial situation to create a plan designed for you.

[1] https://www.cnn.com/2021/08/31/politics/social-security-medicare-report/index.html
[2] https://www.cnn.com/2021/08/31/politics/social-security-medicare-report/index.html
[3] https://www.forbes.com/sites/baldwin/2021/02/05/ira-calculation-errors
[4] https://www.ssa.gov/policy/docs/issuepapers/ip2015-02.html


The content presented is for informational purposes only and is not intended as offering financial, tax, or legal advice, and should not be considered a solicitation for the purchase or sale of any security. Some of the informational content presented was prepared and provided by Lone Beacon Media, LLC dba Lone Beacon, while other content presented may be from outside sources believed to be providing accurate information. Regardless of source no representations or warranties as to the completeness or accuracy of any information presented is implied. Lone Beacon Media, LLC is not affiliated with the Advisor, Advisor’s RIA, Broker-Dealer, or any state or SEC registered investment advisory firm. Before making any decisions you should consult a tax or legal professional to discuss your personal situation.

Investment Advisory Services are offered through SHP Wealth Management LLC., an SEC registered investment advisor. Insurance sales are offered through SHP Financial, LLC. These are separate entities, Matthew Chapman Peck, CFP®, CIMA®, Derek Louis Gregoire, and Keith Winslow Ellis Jr. are independent licensed insurance agents, and Owners/Partners of an insurance agency, SHP Financial, LLC.. In addition, other supervised persons of SHP Wealth Management, LLC. are independent licensed insurance agents of SHP Financial, LLC. No statements made shall constitute tax, legal or accounting advice. You should consult your own legal or tax professional before investing. Both SHP Wealth Management, LLC. and SHP Financial, LLC. will offer clients advice and/or products from each entity. No client is under any obligation to purchase any insurance product.


The content presented is for informational purposes only and is not intended as offering financial, tax, or legal advice, and should not be considered a solicitation for the purchase or sale of any security. Some of the informational content presented was prepared and provided by tMedia, LLC, while other content presented may be from outside sources believed to be providing accurate information. Regardless of source no representations or warranties as to the completeness or accuracy of any information presented is implied. tMedia, LLC is not affiliated with the Advisor, Advisor’s RIA, Broker-Dealer, or any state or SEC registered investment advisory firm. Before making any decisions you should consult a tax or legal professional to discuss your personal situation.Investment Advisory Services are offered through SHP Wealth Management LLC., an SEC registered investment advisor. Insurance sales are offered through SHP Financial, LLC. These are separate entities, Matthew Chapman Peck, CFP®, CIMA®, Derek Louis Gregoire, and Keith Winslow Ellis Jr. are independent licensed insurance agents, and Owners/Partners of an insurance agency, SHP Financial, LLC.. In addition, other supervised persons of SHP Wealth Management, LLC. are independent licensed insurance agents of SHP Financial, LLC. No statements made shall constitute tax, legal or accounting advice. You should consult your own legal or tax professional before investing. Both SHP Wealth Management, LLC. and SHP Financial, LLC. will offer clients advice and/or products from each entity. No client is under any obligation to purchase any insurance product.
Was this information helpful? Should we publish more like this?
YesNo