Those approaching retirement can now buy a type of “insurance” to guard against reduced Social Security benefits.
The product — a rider on an annuity — is the first of its kind, but some experts expect similar offerings to follow as worries over the future of the entitlement program grow due to the pandemic.
“The largest unaddressed fear is the Social Security reduction,” said David Duley, founder and CEO of PlanGap, which has received regulatory approval for the new product in 44 states.
The surplus in the fund that pays out Social Security benefits will be depleted by 2031 — a year earlier than previously forecast — largely due to mass layoffs during the pandemic, according to the Congressional Budget Office. After that, the fund could pay about three-quarters of benefits for retirees, a major hit to the largest source of retirement income for most Americans.
“People are in this