We’re sure you’ve read the news articles, seen the news stories and have seen it all over social media: “Social Security is going broke.” The Social Security Trust fund report says that with no changes, the trust fund will be exhausted in 2033; at that time, taxes collected from workers during that year are projected to cover just 77% of benefits due at that time.
Various fixes are being proposed now to save the program and/or make it viable for future generations.
There are basically three ways to address the problem: do nothing, make raises or make cuts. That’s pretty much it.
Here are some of the many proposals suggested for the Social Security program:
“Do Nothing” Category:
- Do nothing until the trust fund is depleted
- Freeze benefits
- Allow beneficiaries to invest in the stock market
- Use the estate tax to cover Social Security deficits
- Offer a buyout to the wealthy
“Make Raises” Category:
- Raise the earnings cap
- Raise the full retirement age past 66
- Raise the payroll tax on everyone
- Raise the payroll tax cap to $215,000
- Raise the payroll tax rate to 6.6%
“Make Cuts” Category:
- Eliminate payroll tax cap entire
- Cut benefits across the board now
- Cut benefits for the top 25% of earners
- Change the Cost of Living Adjustment (COLA)
In order for Social Security to remain viable, all or some of these ideas, along with some others will need to be implemented. For people receiving benefits, they, in all likelihood, will be grandfathered. Social Security is not going broke, but reforms will need to be made to strengthen the program, and the sooner they’re made, the better.