There’s More Than 1 Way to Cut Social Security Benefits. 3 Ways Seniors Could Get Less in the Future.

It’s been in the headlines for weeks now: Social Security is just six years away from a devastating 22% benefit cut, unless the government intervenes. Politicians on both sides of the aisle agree that this is a serious issue that needs fixing, but so far, they haven’t been able to put together a plan that a majority can agree upon.

The goal is to avoid a drastic benefit cut, but ironically, some of the possible fixes could act as benefit cuts as well. Here are three ways seniors could get less from Social Security in the future than they do today.

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1. A direct benefit cut

Washington hopes to avoid an extreme benefit cut, but that doesn’t mean all benefit cuts are off the table. For example, one proposal says that annual Social Security benefits should be capped at $50,000 for single adults and $100,000 for married couples.

If this were to pass, it would act as a cut to some of the wealthiest Social Security beneficiaries. This would force them to draw more from their personal savings to cover their monthly expenses.

2. An increase to the full retirement age

Some politicians have also discussed raising the full retirement age (FRA), the age at which workers qualify for their full Social Security benefit based on their work history. Right now, this is 67 for most workers. Claiming under this age reduces your checks, while delaying past this age increases them until you qualify for your largest benefit at 70.

Increasing the FRA would effectively be a benefit cut for younger workers, since they would face steeper early-claiming penalties when signing up for checks at the same age as today’s retirees. It’s not guaranteed to happen, but some members of Congress have floated this plan as a possible fix.

3. Changes to Social Security benefit taxes

Under current law, you can owe Social Security benefit taxes on up to 85% of your checks, depending on your provisional income — this is your adjusted gross income (AGI), plus any nontaxable interest from municipal bonds, and half your annual Social Security benefit.

You pay ordinary income taxes on whatever percentage of your checks is taxable, and some people don’t owe these taxes at all. But if the government changes the taxation formula or makes all Social Security benefits subject to taxes, that could leave seniors with less to cover their monthly expenses.

It’s unclear whether any of the above changes will actually happen right now. We’re still waiting to see how Washington will address the shortfall. But if any of these options make it into the final fix, workers and seniors will likely need to adjust their retirement strategies.