Summary

The American population is rapidly aging. The Social Security Trustees tell us that by 2034, Social Security benefits will have to be cut by 23% to support retirees because there won’t be enough people paying into the system to sustain current benefit levels. We must act before millions of retirees who rely on the benefits are harmed.

Recommendations

Means Testing

Social Security benefits should be means tested. 25% of retirees have pension or investment incomes that place them in the wealthy category. Even millionaires and billionaires can collect Social Security benefits. Why should young struggling families hand money over to wealthy retirees? Means testing the system to remove the wealthy retirees would go a long way to ensuring the system’s solvency.

Retirement Age

The retirement age must be tied to life expectancy. When Social Security was implemented, the retirement age was 65, but the average life expectancy was only 59 for men and 61 for women. Many people didn't live long enough to receive benefits. Today, the retirement age is 67, but life expectancy is 73 for men and 78 for women. The system wasn’t designed to support tens of millions of people collecting benefits for long periods of time. Tying the retirement age to life expectancy for future retirees will allow the system to keep paying benefits for those who truly need them.

Retirement Savings

Retirement savings programs like IRA and 401K should be strengthened to provide even more incentives for people to save for their own retirements to reduce future burdens on the system. For example, today taxes on retirement savings accounts are deferred until the money is withdrawn. Retirement savings should be made tax free.