This Social Security Change Will Deal Higher Earners a Major Blow
You may have heard that Social Security benefit cuts could come down the pike in a little over a decade if the program's financial woes aren't addressed. The problem is that Social Security gets the bulk of its revenue from payroll taxes, and that in the coming years, that revenue stream is expected to shrink as baby boomers leave the workforce in droves.
Meanwhile, workers don't automatically pay Social Security taxes on all of their income. Instead, each year, a wage cap is established that determines how much earnings are subject to those taxes.
This year, the wage cap is $147,000, so earnings beyond that threshold aren't taxed for Social Security purposes. But next year's Social Security wage cap is rising quite a bit, and that means higher earners should expect to part with a lot more of their income.
Source Fool.com
