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Four Things Lawmakers Can Do To Save Social Security

By now we’ve all heard the news. If nothing changes, the Social Security trust fund that pays retirement benefits will be depleted by 2033. Once that happens, it will only be able to pay 77% of scheduled benefit payments. That means retirement benefits will automatically be cut by 23% across the board. Obviously, we can’t let that happen.

It’s not too late to shore up Social Security. An article posted on Nasdaq shared four ideas to prevent Social Security retirement benefits from being cut. Their suggestions are to:

  1. Apply Social Security’s payroll tax to all income – Right now, the maximum taxable earnings limit is $184,500. Any income earned above that threshold is not subject to the Social Security payroll tax. Raising the earnings limit would mean higher-income workers are paying their fair share.
  2. Raise Social Security’s payroll tax rate to 13.6% — Right now, the Social Security payroll tax rate is currently 12.4%. Raising it would bring in more taxes to pay benefits.
  3. Gradually increase Social Security’s full retirement age (FRA) to 68 years old – Right now, the FRA is defined as 67 years old for workers born in 1960 or later.
  4. Reduce Social Security benefits for workers with income in the top 20%.

The article points out that these four changes “would collectively reduce the long-term funding deficit by 101%, meaning the Social Security Trust Fund would not be depleted at any point in the next 75 years.”

A Solvency Solution

The Seniors Trust believes the best solution to solving the Social Security solvency issue has already been introduced. We want Congress to enact The Social Security Expansion Act. This landmark bill buttresses the long-term solvency of Social Security by expanding benefits for seniors – not cutting them.

If passed, this legislation will make four major changes to Social Security for retirees:

  • Benefits will be increased for most recipients by about $200 per month.
  • The Consumer Price Index for the Elderly (CPI-E) will be used to calculate Social Security Cost-of-Living Adjustments (COLAs) instead of the Consumer Price Index for Urban WagEarners (CPI-W) used currently. The CPI-E takes the unique spending habits of seniors into account — particularly regarding the cost of healthcare — and offers a more realistic COLA for retirees.
  • The minimum Social Security benefits would be increased to provide higher payments to seniors and greatly reduce senior poverty.
  • The long-term solvency of the Social Security program would be guaranteed.

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