If you’re over 60, it’s likely that you feel your Social Security benefits are secure. If you’re under 60, you may have doubts; and for those who have recently entered the work force it is common for me to hear them boldly proclaim they don’t expect they’ll ever see a penny from Social Security.
Do I think Social Security is in danger? If we do nothing, yes. There are however, numerous ways to fix Social Security. We’ll all have to lobby to get it done. Below are links to several popular proposals to fix Social Security.
The solutions proposed range from small incremental changes to wide sweeping reform. These articles from around the web provide a broad range of Social Security fixes that could be implemented. Check them out, send your favorite to your representatives, and urge them to take action.
This is an easy-to-understand article by Stephen Ohlemacher at Huffington Post. It spells out a few traditional changes that could be made to Social Security in four key areas: taxes, retirement age, cost of living adjustments, and the benefit formula. For each change it specifies how much of an affect it would have on the projected shortfall in Social Security.
In this article Emily Brandon provides twelve possible Social Security fixes and spells out how much of the deficit each change could eliminate. The fixes proposed here lie along the traditional lines (such as gradually raising the retirement age, increasing taxes and reducing some benefits) with the exception of suggestion twelve, which proposes the Social Security trust fund invest in equities.
Third Way describes themselves as "a think tank that answers America’s challenges with modern ideas aimed at the center. We advocate for private-sector economic growth, a tough and smart centrist security strategy, a clean energy revolution, and progress on divisive social issues, all through moderate-led U.S. politics." Their Social Security Idea Brief starts off by saying that by 2030 the U.S government is projected to spend 68 cents of every dollar on Social Security. Ouch! It goes on to propose what they call a “Savings Led” reform plan that proposes to increase benefits for lower income earners while increasing the retirement age to match longevity. It’s an interesting plan proposal to fix Social Security and worth reading.
This PBS Article Social Security: Absurdly Complex? Not that Hard to Fix?
provides commentary by Larry Kotlikoff, Boston University economist, and Paul Solman, Business and Economics Correspondent for PBS NEWSHOUR. In the article Larry proposes his Social Security fix at The Purple Social Security Plan
, where he provides a concise and easy-to-interpret summary of how the plan works, and let me tell you, there is nothing traditional about it. It differs substantially from the proposals in the articles above. One of his suggestions on how you fund for your legal partner’s account is brilliant. It would significantly reduce the complexity of spousal and survivor benefits, which currently are difficult to navigate without software or years of study.
article by Alex J. Pollock also offers a non-traditional proposal to fix Social Security. The author says, “So would you rather have 83 cents of your own, which you could invest, or would you prefer 100 cents of future claims on an admittedly insolvent government pension program? I'd take the 83 cents in a heartbeat. But I think the choice should be voluntary. So I propose that Americans be given this choice: Stay in Social Security as it is, or settle for 83 cents on the dollar.” I’m not so big on this proposal. Much of America would take the 83 cents, spend it foolishly, and our country would be left with broke seniors to support. Sounds like a mess to me.
For a comprehensive look at numerous proposals check out Fix Social Security Now
at the link above. This site provides a summary of the plans mentioned above as well as numerous proposals that I have not mentioned above such as Simpson-Bowles, Heritage Foundation, Well-tailored Safety Net, Cato Privatization, Hutchison Plan, and many more. Be sure to check out their Facts Vs. Myths
section for a useful look at how to wade through the politically motivated, but often untrue comments that you see flying around.