Tired of Worrying About Social Security Solvency? Here's a Sample of Ways It Might Be Saved.
Key Points
Unless Congress acts, monthly Social Security benefits are expected to be cut by 20% to 25% around 2033.
Most proposed solutions include raising or eliminating the tax cap.
Congress can pick and choose from the best proposals to shore up Social Security for decades to come.
- The $23,760 Social Security bonus most retirees completely overlook ›
It's easy to grow weary of bad news, and for some, Social Security's solvency is just one more piece of stinky news. If you're among those who are tired of worrying about whether the program will be there for you when you need it, this list may serve as a reminder that all hope is not lost.
Here is an (extremely small) sample of the proposals being floated, some developed by members of Congress and others from think tanks and senior advocacy groups:
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Some of the proposals
The Social Security Expansion Act: Introduced by Sen. Bernie Sanders, a Vermont Independent, and Rep. Jan Schakowsky, an Illinois Democrat, this act would increase payroll taxes on high earners, revise how cost-of-living adjustments (COLAs) are calculated to better align with the spending patterns of individuals 62 and older, and establish a new minimum benefit for certain low-income earners.
The Social Security 2100 Act: Similar to the act mentioned above, this measure, introduced by Rep. John B. Larson, a Connecticut Democrat, would improve how COLAs are calculated. It would also subject earnings above $400,000 to Social Security taxes.
According to the Peter G. Peterson Foundation, a fiscal policy think tank, eliminating the tax cap would decrease the program's long-term funding shortfall by 73%.
Raise the retirement age: The Republican Study Committee has proposed raising the full retirement age (FRA) to 69. While it wouldn't affect current retirees or those near retirement, individuals age 59 would see the FRA increase by three months per year beginning this year. A person turning 62 in 2033 would need to work until age 69 to receive full benefits.
The Cassidy-Kaine Proposal: According to the Bipartisan Policy Center, Sens. Bill Cassidy, a Louisiana Republican, and Tim Kaine, a Virginia Democrat, have introduced a plan to borrow $1.5 trillion to establish a trust fund paid for by general revenue and fully invested in equities. The fund's returns that exceed the interest costs on the added $1.5 trillion in debt would be credited to Social Security benefits in 75 years. While this plan wouldn't help current retirees, it could prevent a shortage like this from happening again.
There are countless more proposals moving through Congress. That doesn't guarantee legislators will be able to put aside partisan differences long enough to agree on a workable solution, but it does provide evidence that solutions exist.
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