Getting Old Might Soon Get Easier
Baby Boomers and Other Elders

How Would You Fix Social Security?

Separate from the determination of some members of Congress to cut Social Security across the board, is the program's shortfall. It is not serious but it is real and even though several do-able solutions have been discussed for years, the government has taken no action to correct the problem.

A few days ago, the University of Maryland Program for Public Consultation issued the results of a survey of about 2,000 people taken last fall asking how they would solve a variety of budget issues facing the nation.

Here are the results from the section on Social Security's shortfall. (There is more discussion of each choice and results of some broken down by age and political affiliation at the survey [pdf]. The Social Security section begins on page 38.)

1. Raise the payroll tax [FICA] ceiling to $156,000.
Solves 25 percent of the problem.
83 percent found this acceptable.

2. Completely eliminate the payroll tax ceiling.
Solves 75 percent of the problem.
78 percent chose this.

3. Increase the payroll tax 1 percent over 20 years.
Solves 45 percent of the problem.
85 percent agreed.

4. Calculate starting benefits based on the inflation rate of prices, not wages. *
Solves 25 percent of the problem.
79 percent chose this.

5. Adjust cost-of-living increases to buying patterns most relevant to older Americans. *
Solves 25 percent of the problem.
75 percent agreed.

6. Raise the retirement age to 68 by 2034.
Solves 13 percent of the problem.
65 percent agreed.

7. Raise the retirement age to 70 by 2048.
Solves 38 percent.
41 percent agreed.

8. Increase Social Security tax 1 percent over 20 years.
Solves 75 percent.
38 percent chose this.

9. Reduce benefits by 25 percent overall.
Solves 50 percent.
19 percent chose this.

* Both of these would result in slightly lower benefits.

Personally, I would choose items 2 and 4. I am loath to raise the retirement age and I don't want to lower benefits particularly since millions who have been unemployed for years and millions of others whose salaries have been cut will already receive smaller benefits than if the economy had not tanked.

If these were the only choices, what would you do?

At The Elder Storytelling Place today, Vicki E. Jones: Banjo Was a Good Ol' Hound


I would pick eliminating the payroll ceiling (#2). I wonder about the ramifications, though--never having earned near the ceiling. Unfortunately, I realize I have a gut opinion, but not an informed one. I guess I better start doing some research and thinking on this.

I would pick #2 or #8

I'd pick #2 and couldn't choose between #4 and #5. The way the poverty rates, unemployment rates, and the inflation rates are figured don't reflect the actuality. Those measures need to be corrected or separated from the methods used now.

I'd pick #2 and since that doesn't solve the problem still be faced with what to do. I guess I'd go for raising the age to 68 for full benefits which means people could still qualify for lesser amounts earlier. There are no easy answers on this once you get past the first one because there will be more retired and people do want to retire quite a bit younger than they once imagined doing. I am glad they didn't list means testing as I think that's a very unfair idea as it would turn SS into welfare and lose its uniting us as a people by all being on it at a certain point.

2 and 3.

I would pick #2..That is the best solution.

I would not want to raise the retirement age beyond 65 because the longer a person holds on to his/her job the less opportunity there is for a younger person to take that higher paying position,thereby raising their own Social Security benefit.

Definitely #2 and possibly #3. At 51 years old I have a number of work years still ahead of me. This year, for the first time in my life, I've had to take a pay cut. So, while the increase in my paycheck due to less being taken out for SS is greatly appreciated right now, I know I will have to pay for it sooner or later down the road.

My choice would be #2 and #3.

I think it needs to include everyone to be fully funded but that also means paying out benefits to billionaires in the future. How does this change the equation?

Social Security is already paid to billionaires. There is a benefit limit - currently around $2200 or $2300. No matter how high a person's salary, that is the limit of what Social Security pays.

To not pay Social Security benefits to high earners would be a means test turning the program into a poverty program instead of the insurance program it is - and that would make it easier for Congress to cut Social Security in the future.

Definitely 2. Folks who make that kind of money would barely notice in daily life, tho they'd howl. For the balance, I'd pick 8, just to be fair. SS is, after all, insurance. We pay for it all our lives which makes legislative efforts to tinker with it or reduce it the more galling!

It looks like #3 and #8 are the same but the outcomes are different. #3 says it will solve 45 percent of the problem and #8, 75% of the problem. Am I reading this wrong?

I wouldn't be opposed to a means test for those who have a healthy private retirement package from their careers where they brought in $500,000 annually or better. This will affect less than 2% of retirees and will be chump change for them.

Make it applicable long enough to correct deficiencies and remove it when the system is solvent for 50-75 years where benefits are at 100%

#2 for me ....

Of course these are not the only options, just the most discussed.

Nos. 1 and 2 are forms of progressive tax, not that there is anything wrong with that. They would have the same critics as those who oppose any "means" testing. Raising or eliminating the income ceiling are good choices as long as neither is combined with means testing, which would constitute progressive tax double jeopardy.

As for means testing (not one of the choices unfortunately) eliminating SS "for billionaires" isn't the idea at all. Rather, it is asking people of substantial means to forgo 4 or 5 cents of every dollar that they were initially promised. I'm in that category (luckily) and I could accept a little less for the good of the program.

Indexing starting benefits to wage inflation (no. 4) was always a bad idea but it bought a lot of votes for venal political candidates. It should go away.

Another option, not included, is the inheritance tax option. When that tax finally, and appropriately returns, it could be earmarked for SS. It wouldn't make a huge difference but the optics would be good.

Any further raising of the retirement age (Nos. 6 and 7) is simply unfair and unkind to those who have toiled many years in physically demanding jobs.

Cutting everyone's SS by 25% (No. 9) is dead on arrival based on moral grounds alone.

Raising the payroll tax or SS tax by 1% over 20 years (Nos. 3 and 8) may be o.k. but either ought to be a last not a first resort. Our work force will likely soon see increases in income taxes anyway. Let's not pile on.

Fixing SS is the Baby Boom's chance to mend its image of being a selfish, navel-gazing, greedy cohort. We currently have the political and financial clout to provide the spine to those who are spineless in DC. If we ever hope to be remembered, as our mothers and fathers were, as a "great generation", we had better make sure that it is not our currently designed entitlements that topple the American economy

Eliminate the payroll tax ceiling!

I'll never forget my shock when, as a young office worker, I first learned that high earners got this unbelievable break.

I'd choose #2 and #3 but fight #6 and #7. I read somewhere that raising the full retirement age to 66 translated to a 7 percent reduction in benefits; but each additional year meant larger percentage reductions, not just 7 percent each time.

Raising the retirement age harms low-income people disproportionately because they have shorter life spans and little in the way of other assets.

I would choose #2 and either 4 or 5 depending on the bundle of goods they put in the basket for each. I believe I would rather be in the aggregate prices group of #4, though, rather than trust the bureaucrats to pick what I buy.

One of the problems with SS that no one seems to be talking about is the lack of good middle-class jobs and stagnant/falling wages. When the only people with rising incomes are the rich who don't contribute to the system beyond the first $106k, then the problems will likely get worse unless they start paying more.

And I disagree with Bruce Brittain that there should be means testing of any kind. This would turn SS into welfare program instead of an entitlement that people have earned and it would be torn to shreds by the conservatives later, if not sooner.

Good to know that we can disagree without being disagreeable.

Claiming that a "means test" for SS would suddenly transform it into a "welfare program instead of an insurance program" fails to take into account the history of SS and its intent when enacted in 1935. It was aimed at the destitute elderly but included everyone because that was the only way to get the legislation passed. It was for those 65 plus in a era where average life expectancy was 56. An actuary's dream. We live in a very different actuarial world.

Whether or not a means test would make it easier for congress to make additional alterations in the future seems to ignore the current difficulty of getting any changes made, however small. Why it would be any different in a "means tested" future escapes me.

The fact that the SS payroll deduction cap is already far above what most workers earn per year means that in SS's pay-as-we-go system, it already partially meets the welfare system definition posited by some commenters.

Seems to me that the small sacrifices needed to balance the SS books should be borne by those of us who were lucky enough to truly live the American dream in a bigger way than most. I see it as an obligation, reminiscent of John Kennedy's famous inaugural quote.

I've seen more than one poll lately that gives the same results as the Public Consultation study. It's going to be interesting to see how our Democracy responds to the wishes of the people.

Personally, I do not want to see reduced benefits or an increased retirement age. Only the very naive would demand 70 years old as mandatory retirement age.

I also believe that those who have done very well under our system can pay a bit more. Many who have made their fortunes have done so under conditions that have been detrimental to their employees.

None of the above. Have the government pay back the trust fund all the money it stole. Then decide how to make up the relatively small difference. There should be more public awareness of this theft and the cover up.

But if the only choices, I'd select #2 or #1 as backup.

Paying back the trust fund is a great idea, John, but the chances of that happening are about as probable as right-leaning Republicans understanding what the word empathy means or suddenly realizing that the Christianity many of them purport to practice says something about caring for the least among us.

Anyway, my vote goes to #2 and #4, with #3 as my 3rd choice.

I would vote for 2 and some combination of 3 and 8. However, with the corporate ownership of government I doubt my choices will prevail. i will fight for them anyway.

I would not choose any of the above choices. I would instead STOP the Government from giving Social Security benefits to the lazy. By lazy I mean people who sluffed off because they could and still get by all their working-able years. ( I do not mean people who are widowed or disabled.)

Do you realize that an ex-spouse can draw from their ex-spouses work record, even from the years that they were NOT married?!

Two people were married for 10 years or more.
Ex#1 works as little as possible all his/her life, perfectly able to work.
Ex#2 works hard for his/her family all his/her life.
It is now 20+ years later (after the divorce).
Ex#2's work record shows more input to Social Security in that last 20+ years. Most of his/her Social Security benefit is from those 20+ years that they were not married!
Ex#1 only has, say 700 coming at age 62, because of his/her own accord.
While Ex#2 has 1600 coming at age 62, because of his/her own work ethics.
Ex#1 can now draw from Ex#2's work record, i.e. receiving the 1600 a month at age 62 that he/she did not earn!

It does not affect the amount the other ex-spouse receives. But that is not the point.

The Government is giving away this money to someone who did not earn it and further does not need it.

Lazy people are being rewarded.

It is not fair to the hard-worker. And it is not fair to the future people who will need Social Security.

This money, the 900 a month or more (the difference between 1600 and 700), depending on that that person decided to retire, is money that Social Security is being drained of unnecessarily!

Think of the thousands of people receiving even 900 more than they deserve. That's 900,000. Now we know there are more than a thousand people who can drwa this money that way. So do your math! Let's say Ex#1 waits to draw until 65 or 70. Now they are receiving 2100 or more, i.e. say 1100 more a month than they would have if they had to draw only on their own work record. Now, multiply THAT by a thousand: 1,100,000. Again.. we know there are more than 1000 people who can and will draw from their ex's work record. Again, do the math.

That money (thousands, millions, billions+) could go to the disabled, the truely helpless, or more to the deserved.

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