Changes Americans are willing to make to fix Social Security

[Blooming Late]

CNBC
"Here are the changes Americans are willing to make to fix Social Security, survey finds"

https://www.cnbc.com/2022/06/08/sur...ans-would-make-to-repair-social-security.html

These seem pretty reasonable, I believe. I do however suspect most politicians will avoid dealing with the issue until the last minute/impending benefit reduction.

Would you support some or all of the changes?

 

[aaronc879]

I am in favor of most of those changes but not the age increase. A large amount of blue-collar workers can't even physically work until age 62 let alone 67 or 68. If they raise the retirement age to 68 they at least would have to keep the minimum SS age at 62 and institute the minimum benefit stated in the article that includes people who retire at age 62 as long as they had 30 years of work.

 

[frayne]

Political suicide for any politician to vote for benefit reductions.

 

[aaronc879]

Political suicide for any politician to vote for benefit reductions.

But it's also political suicide for one group to vote for a tax increase. So how do you keep at least the current benefits without increasing the tax? Only way I know of is to increase the retirement age and that is very bad for blue collar workers.

 

[GenXguy]

I would support raising the retirement age for younger people but not for people that are already 50, or perhaps at least 55, since they are getting so close and are making more firm plans. Not just for blue collar workers, but anyone. But then 68 hardly seems fair for a low SS benefit when so many people get government pensions for a lot more starting at a much younger age despite a small contribution.

Sadly, the lack of any action results in automatic SS benefit deductions - they don't have to vote for those reductions.

 

[bloom2708]

Raise the cap on SS wages. Raise it to $400k.

 

[MercyMe]

Raise the cap on SS wages. Raise it to $400k.

I couldn't agree more!

 

[Chuckanut]

I regards to raising the full retirement age, what I know is this. My father got full retirement at 65. I had to wait until 66. I am not complaining. However, raising the FRA a year or so is already in the history of the SS program. Nothing new.

I assume (<-- dangerous word) that if FRA was raised to 67+, then anybody retiring at 62 would get a bigger percentage reduction in benefits than today.

 

[MRG]

I'd support all.

 

[jollystomper]

Any survey on "what changes you are willing to make" needs to contain the question "are you personally affected by the changes you are willing to make" .

 

[corn18]

I couldn't agree more!

And add another bend point. Taxation without benefits will never fly. But add another bend point at say 5% of the amount over $10,000. Won't be a good ROI, but for high earners, at least the gov't can say they are getting some benefit from having their income taxed.

 

[Montecfo]

I think increasing the wage threshold makes sense. Increasing retirement age for full benefits makes sense with people living longer (preserving early retiremement at 62). This would not inpact people older than 45 say. Inceasing the tax rate modestly also makes sense.

With these changes, everyone is "giving" something, which is consistent with the reform model in the past.

I do not think the benefits should be incresased for a plan that is not paying its way.

I am a bit dubious about making it less available to higher earners, but I guess it could be lost on a year-by-year basis through your tax return (the way ACA subsidies are phased out). I would not want to create a new bureaucracy to test for that.

I think raising taxes a lot on high earners and also taking away their benefits is outside the spirit of SS (a "quasi-pension) but within some bounds may make sense.

 

[Chuckanut]

Today's WSJ has a commentary by former senator Rudy Boschwitz of Minnesota. In it he suggests a number of changes to the program that would keep it solvent. Almost all require present and future workers and retirees to take a hit. A lot of the hits would be spread out over time. Workable? I don't know.

Here's the link and yes, there is a paywall. Sorry about that.

https://www.wsj.com/articles/social...-benefits-eligible-savings-11654631767?page=1

At a 1983 White House Rose Garden ceremony, I sat next to a Senate member of the Social Security Reform Commission. I told him, “You can fix Social Security by not indexing the bend points for five years.” His response: “What the hell are bend points?”

These are his points, but I have left out his reasoning since that would have required cutting and pasting the entire article. Sorry about that.

Raise the full retirement age further.

Raise the early eligibility age.

Change the way benefits are calculated for new recipients.

Slow the growth of benefits for new and existing beneficiaries alike by changing the basis on which they’re indexed for inflation.

Withhold some Social Security COLAs from higher-income retirees.

Give the COLA not annually but every 14 or 15 months using the 12 months of lowest inflation.

Tax Social Security income for higher-bracket taxpayers, and give them the option to forgo all or part of their monthly payment.

Raise the payroll tax by 0.1% of wages every other year—half from withholding, half for the employer’s contribution—for 20 years, a total tax increase of 1%.

 

[marko]

Raise the cap on SS wages. Raise it to $400k.

I've never understood why raising the cap is such a problem. In my work days I'd hit the cap sometime in March or April. I never would've minded keeping it through the year, it was money I never missed in the first place.

It just seems like such an easy,simple thing to do! But then again, we're talking about Congress

 

[cathy63]

I regards to raising the full retirement age, what I know is this. My father got full retirement at 65. I had to wait until 66. I am not complaining. However, raising the FRA a year or so is already in the history of the SS program. Nothing new.

I assume (<-- dangerous word) that if FRA was raised to 67+, then anybody retiring at 62 would get a bigger percentage reduction in benefits than today.

FRA is already age 67 for those of us born in 1960 or later. If they raise it again, it would go to age 68 or older.

 

[Phroig]

A staggered increase in the cap might be palatable.

Just to make this thread interesting, is a fix that impacts only those working, but not those retired, fair?

 

[SecondCor521]

I've never understood why raising the cap is such a problem. In my work days I'd hit the cap sometime in March or April. I never would've minded keeping it through the year, it was money I never missed in the first place.

It just seems like such an easy, simple thing to do! But then again, we're talking about Congress

Most people don't understand that currently income above the cap is neither OASDI-taxed nor contributes to the individual's SS benefits.

If they raise the cap, the income would be taxed but there are two options:

1. Also reflect that income in the individual's SS benefits. Politicians may decry this as raising Social Security benefits for the rich.

2. Not reflect that income in the individual's SS benefits. I think this is new ground in the sense that all other OASDI-taxed dollars have at least a chance of providing a benefit down the road. Straight taxation without any benefit wouldn't sit well, but it wouldn't sit well with higher income folks, so they might just have to suck it up.

I suppose one could create a third bend point as a compromise between the two above options.

My prediction continues to be that there will be a political response sometime before 2035 where the OASDI taxes will be raised and benefits will be increased somehow. The increasing benefits part doesn't make much sense in terms of solvency, but I think it helps people accept the higher taxation: "Oh, well at least I know get free Netflix with my SS benefit" or whatever it ends up being.

 

[FANOFJESUS]

Raise the cap on SS wages. Raise it to $400k.

Do away with the cap all together. I am guessing that 90% of workers are under the cap right now.

 

[almost there]

Stop using it for a piggy bank. Problem solved.

 

[TheWizard]

SS needs a better ratio of working people to retired people.
COVID did a decent job of killing off lots of us older folks (I'm 72).
So maybe we need to make more younger folks now...

 

[corn18]

Do away with the cap all together. I am guessing that 90% of workers are under the cap right now.

According to the SSA website, 94% are under the cap.

 

[martyp]

I’ve been hearing these proposals all my working life. I took Social Security at 62 because I felt that it was better to be in the system rather than out of the system when (and if) changes are made.

 

[GenXguy]

A staggered increase in the cap might be palatable.

Just to make this thread interesting, is a fix that impacts only those working, but not those retired, fair?

No. Gradually making changes based on age seems more fair. Someone more reliant on SS may need to work longer while the early retiree may not need SS.

 

[Aerides]

I've never understood why raising the cap is such a problem. In my work days I'd hit the cap sometime in March or April. I never would've minded keeping it through the year, it was money I never missed in the first place.

It just seems like such an easy,simple thing to do! But then again, we're talking about Congress

My understanding is it's because there is a cap on benefits. So, you'd be asking some folks to pay more in, without any corresponding increase on the way out. (fine with me, probably fine with a lot of those high earners to). But the worry about position (capped benefits, uncapped contributions) is that removing the cap would further erode overall support for the program among particularly tax-averse voters.

I don't see raising the ages as helping - firstly because the age expectancy hasn't risen hardly lately, and secondly because post-60, good paying jobs are harder to find than they are when you're 35 and mid-career.

 

[Zathras]

SS needs a better ratio of working people to retired people.
COVID did a decent job of killing off lots of us older folks (I'm 72).
So maybe we need to make more younger folks now...

Kids are too expensive