Social Security is currently fully funded through 2032. And after the trust fund runs out the program faces automatic 25% benefit cuts for EVERY recipient.  Please read that again so we’re clear.  Those of you looking to rely on Social Security as a PRIMARY or even as a secondary means of retirement income need to seriously reevaluate that decision TODAY.

According to the SSA, Social Security has been running a deficit since 2010 and owes $11.3 Trillion more in benefits over the next 75 years than it will receive in payroll taxes. For more read this article by David C. John of the Roe Institute for Economic Policy Studies.

Some proposed fixes to the Social Security deficit are as follow:

• Fix the annual cost of living adjustment to accurately reflect the best available inflation index. Using a ‘chained’ index would reduce the inflation amount by about 0.3% per year.
• Increase Full Retirement age. People are living longer now. Full retirement age is now 67. It is suggested that full retirement age be increased to between 68 and 70 years old.
• Focus Social Security benefits on those who most need them. This is a sore spot for some but the program was originally designed to protect seniors from poverty and economic hardship. It has been suggested that Social Security focus benefits on lower income workers by paying lower benefits to those with high levels of non-Social Security retirement income. Or even more drastic: Completely eliminate benefits for those with the highest amounts of non-Social Security income.
• Increase Social Security taxes. We currently pay 6.2% of our earning into the Social Security system up to $117,000 of earned income. If that tax is increased to 7.2% by 2036 it would eliminate over half of the deficit.
• Lift the payroll tax cap. The rich don’t pay Social Security tax on anything more than $117,000 of their incomes. If this cap was gradually eliminated  it would reduce the deficit by 71%.

This crisis is real. And if you live past 2032  you will be affected. I won’t even be 67 yet. So the legislation that passes on this subject is EXTREMELY important to me and YOU. We have to pay attention to this conversation and engage our lawmakers so the necessary changes are made to fix the Social Security crisis. DO NOT keep your head in the sand on this my friends. It’s too important. And it CAN BE FIXED if we stay engaged!