An Argument for Indexing Social Security’s Full Retirement Age - Tampa Bay Times
Most of the rhetoric on Social Security’s looming solvency problem focuses on the program’s Trust Fund reserves and their systematic depletion, emphasizing the likely across-the-board reduction in benefits when the Trust Funds reach zero (most recently forecast to happen in 2033 (or, according to some analysts, 2032). The reasons why this mathematical dilemma exists is fairly simple–it’s demographics: longer lifespans, a declining ratio of taxpaying workers to beneficiaries and lower birthrate projections, along with lower rates of return on the reserve funds.
All that’s good to consider, but an article posted today on the Tampa Bay Times website by contributor Brenton Smith poses a longer-range viewpoint…the concept of Social Security’s problem being one of unfunded liabilities over a 75-year projection period. With each passing year of inaction on the problem, this liability grows, to the tune of $700 billion, with a current nearly $20 trillion unfunded gap between promised benefit payments and the program’s ability to pay.
Startling numbers, for sure, whether you’re focused on the short term or the long term. The bottom line, though, is that Social Security faces a problem that is not self-correcting. It requires legislative action–make that legislative courage–and it needs to happen soon. As Smith points out, one of the clearly obvious corrective steps would be to index the full retirement age–currently set at 67 for those born in or after 1960–to help contain benefit expenditures over the long term and make them more reflective of today’s demographics. Read Smith’s post in full here…
It’s an interesting perspective, mirroring one of the key measures advocated in the Association of Mature American Citizen’s (AMAC) Social Security Guarantee, a legislative framework proposed by AMAC Action and repeatedly advanced for discussion in Washington. To review AMAC’s full proposal, click here…
Social Security can be fixed raise the percentage 2.5 percent on employer and employees. the republican party would like to end social security . they don,t want to fix anything that helps working class .
Without getting into a political discussion and with respect for your opinion, simply raising the SS tax rate on workers’ earnings doesn’t address the root cause of Social Security’s looming financial dilemma. As pointed out in the referenced article, Social Security’s current financial woes are largely a result of continuingly increasing life spans and reduced birthrates, both of which contribute to a reduced ratio of workers contributing SS tax to the program vs. SS recipients collecting benefits. Simply throwing tax money at the problem may be easy, but it neglects the root causes of the problem. It also unnecessarily takes money from all American workers and their employers via higher payroll taxes. Social Security’s current financial issues can be fixed without further burdening American workers and employers with additional taxes – it’s a matter of Congress finding the will to reform the program in a way which addresses the root cause of the problem, as suggested in the article you referenced.
Russell Gloor
National Social Security Advisor
The AMAC Foundation