Social Security Talk

In the States, Congress is starting to mull the inevitable tax hikes and benefit cuts needed to save Social Security. Sometime this year, for the first time ever, the fund will begin paying out more than it collects. By 2037, the current projections suggest, it’ll be out of money entirely. Clearly, something’s got to give.

So… who’s going to pay more, and who is going to get less? The Senate Special Committee on Aging published a report this week with a few suggestions on plugging the gap. According to the report:

• The whole $5.3 trillion budget gap over the next 75 years could be filled if payroll taxes were increased 1.1 percentage points, to 7.3%, for both employees and employers
• If all wages were taxed for SS, not just those under $106,800, that would fill the gap, too
• 75% of the shortfall could be wiped out by reducing cost of living increases 1 percentage point every year
• About 25% could be saved by bumping the “full benefits” age from 67 to 68.

Heh, so pick your poison. We wonder if any politician will have the stones to campaign this year on a “more taxes, fewer benefits for the elderly!” ticket. Hmmm…

We recommend you start beefing up your own retirement plan.