Next year is going to be a big year for politics with the Presidential elections. It also is going to be a big year for the Social Security system. Why? For the first time since 1982 payroll tax revenue will not be sufficient to cover Social Security benefits, as reported by NYT earlier this week.
Retirees should not worry, yet. There is enough money in the trust fund to keep the system whole for 15 more years. But then the federal government would have to reduce benefits by about 20 percent.
It is unlikely that both houses of Congress and the President will come up with a solution before 2021. Every year when the problem gets ignored makes the pain (reduced benefits, tighter benefit eligibility, higher taxes, or some combination of all of the above) that much worse. Modest delays in retirement age and modest hikes in the payroll tax will resolve the problem if these steps are taken now.
Although today's candidates would rather talk about building a beautiful wall or launching a Green New Deal, voters should be pressing them for answers regarding how to save Social Security.
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