The Board of Trustees for Social Security just released its report on the solvency of the Social Security program.
In a nutshell, the report states that Social Security benefits, under its present funding through payroll taxes on wages and self-employment income, will have to reduce benefits by 23% beginning in 2035.
That’s only 19 years away.
So if you connect the dots, there needs to be changes sooner rather than later to secure the foundation of the program.
The list below states the options being discussed. Some of the options are more preferable than others to lawmakers. This article passes no judgement on any.
- Raise the earnings cap to 90%-100% of all earnings – presently $118,500
- Raise the age for eligibility to 68, 69 or 70
- Reduce the calculations for the yearly COLA
- Encourage private savings
- Gradually increase the payroll tax to 7.2%
- Means testing
- Decrease the delayed retirement credit percentage
As I mentioned above, some form of change needs to be made sooner rather than later. If the changes are not made soon, the pain will be greater to fix the system.