I Tried to Fix Social Security. It's Harder Than It Sounds.

You'd think with Social Security now just six years away from insolvency, that Washington would be hard at work trying to avoid a 22% benefit cut. It's true that several members of Congress have put forth proposals, but none have garnered much support so far. Partisan politics pose a significant challenge, but that's not the only reason we're nowhere near a solution.

It's also a genuinely tough problem to solve. I tried my hand at it using the Committee for a Responsible Budget's The Reformer tool, and it was a pretty big wake-up call.

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How I tried to fix Social Security's solvency crisis

The Reformer tool gives you a list of all the major strategies the government could use to alter Social Security and lets you check and uncheck options to see how they would affect the program's income, expenses, and trust funds. Most options reduce the shortfall, while a few increase it but promise larger benefits in return.

I started with one of the possible fixes that's the least damaging to ordinary Americans: eliminating the taxable maximum on Social Security payroll taxes. In 2026, you only pay this on the first $184,500 you earn, meaning the wealthiest Americans don't owe these taxes on a lot of their income.

Eliminating this cap would force high earners to pay payroll taxes on all their income, just like ordinary Americans do. If you increased wealthy Americans' Social Security benefits accordingly, you'd eliminate 44% of the projected shortfall over the next 75 years, and if you didn't grant a benefit increase, you'd close the funding gap by 61%.

That seemed like a good start, but then I saw the long-sought-after option to index Social Security cost-of-living adjustments (COLAs) to the Consumer Price Index for the Elderly (CPI-E) instead of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which is used now. The CPI-E better reflects senior spending and would better help Social Security benefits keep pace with inflation. But making this change would increase the funding shortfall by 11%.

Those two choices eliminated half the projected shortfall in my scenario. But I was out of easy options after that.

Ordinary Americans will inevitably pay a price

There were still a lot of strategies on the table, but they all hurt someone. Reducing benefits or increasing benefit taxation would hurt seniors. Raising the payroll tax rate or increasing the full retirement age (FRA) would leave workers struggling. There weren't any options I felt really good about.

That's what Washington is facing as it tries to figure out what's next for Social Security. In every scenario, millions of Americans are likely to be left unhappy, and I'm glad I don't have to be the one to make that call.

Instead, I'm focusing on what is in my control: working hard, making regular retirement contributions, and keeping my spending manageable. Once the government announces its Social Security fix, I might need to make some changes to my savings strategy, but those fundamentals will still be important.

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