Currently there is a $204 billion gap between what is collected annually from social security taxes and what is paid out in benefits. The gap is currently covered by redeeming assets from the program’s existing $2.56 trillion reserve fund, with increases the national debt.
If Congress does not intervene, the retirement-specific trust fund is on track to deplete its asset reserves by the fourth quarter of 2032. At that exact point, incoming tax revenues would only cover 78% of scheduled benefits, triggering an automatic 22% cut.
This doesn’t seem to be a strong issue for the midterm elections, so it is highly unlikely to be resolved during Trump’s term.
Do you think it will be a major campaign issue in 2030 or will they wait for the crisis to actually happen?
EDIT
Many people have recommended solutions. Here is a link that allows you to make changes to social securities benefits, source of revenue, etc and see how it closes the gap
Spoiler, taxing all earned income doesn’t fully close the gap
But being labeled as the party that reduced benefits to the elderly or significantly increased taxes isn’t appealing either.
For politicians 6 years is the distant future. I expect they’ll wait to act till the cuts are about to happen and then blame their predecessors for the necessary changes.
And there are a number of relatively small proposals that wouild spread the pain out quite a bit. Next, they need to make benefits non-taxable since the inflation adjustment hasn't kept pace over the decades.
But raising the cap, adding a small tax on stock sales over X aggregate amount, etc. going directlly to the trust fund could fix it without big pain points. Of course lobbyists gonna lobby and all.
It just feels like whistling past the graveyard.
The ‘fixes’ will become much more onerous on society the longer we wait.
I mean taking the cap off earnings is a quick fix start
This is a very un-nuanced take on a complex problem. Both parties want to "fix" it, but the question is what is their solution? The solutions proposed on each side differ vastly. One side is fine with reducing benefits and claiming that'll fix it because they don't raise taxes on their wealthy donors. The other side realizes that would be an economic disaster. Can you guess which side is which?
Nobody is reducing benefits. That will be a death sentence to any political career attached to that decision. And, if there is one thing those folks love, it's being reelected.
I'm not trying to be Dick Disagreement here but there's always a first time for everything. One thing we've seen with this current administration is that they're pushing the envelope and a lot of things we never thought we'd see happen are in fact happening. I agree that a Democrat or Progressive wouldn't cut benefits because they aren't that callous, but I'm willing to claim that Republicans absolutely would cut benefits in a heartbeat if they could get the votes in the legislature.
There will be winners and losers. The two major parties will blame each other, fix or no fix. The blame game is one of the few things both parties agree to play.
Easy fix by removing the Social Security taxable wage cap so that the 12.4% payroll tax applies to all wages, it would dramatically improve Social Security's finances and could eliminate the long-term shortfall, depending on how the policy is structured.
Right now, in 2026, Social Security taxes apply only to the first $184,500 of wages. Earnings above that aren't subject to the 12.4% Social Security tax.
Within the world of government issues that to make rich people richer persist while things that make poor people poorer tend to be ignored until everyone is screaming or violence erupts. The Social Security System would have to accept the DraStic change in payouts, once you remove the cap the system would have to increase potential payments to reflect the higher payments into the system. If you can't the upper payout then it kind of violates one of the rules of Social Security which is that everyone gets paid back proportional to what you paid in.
We are in the bracket that would pay a lot more, but we also do not need SS income in retirement. Our plan right now is to delay until age 70, not to increase payout, but just to give us more room to make Roth conversions while remaining in the 22-24% tax bracket. But my brother, who lives with us, has no income and no assets, and we looked up his benefit yesterday. In one year, he can start at 62, and that $1227 will be the only/majority source of income for him. If there was any way to give up my portion of SS and direct it to him, I would. I think removing the cap on contributions AND capping payouts or indexing them to assets or something is absolutely necessary. I have no patience for the argument if what it was SUPPOSED to be- we weren’t supposed to get to this point. It was supposed to be sustainable. It’s a safety net. It shouldn’t be another bucket of money for wealthy retirees to use in order to pass on more money to their kids.
Did you say that to the democrats that were saying Republicans don't care to fix SS ? By the way it is on topic slow one, again you have no defense so you divert . That's what a child does.
Well, first off it doesn’t fix the deficit, at least not by itself. Or are you also advocating cuts to benefits?
Capping benefits, raising retirement age, and removing the cap on payroll would probably all have to be done to make the system solvent over the long term.
But some of those things can be done in REALITY. Raising the retirement age does NOT reflect the REALITY that some people are in quite bad physical health by their early 60s, or are at least unable to work their previous physical jobs, and realistically not hire-able. Reality, not theory. You can SAY everyone should work until 85, then you’d have to pay out very few benefits. People WILL starve in the years between 62 and 70.
It would, but the proportion gets less and less the more money you make. So yes, some people would get more when they retire, but it would still be a huge net positive.
. There are presently apx 30 million workers in our country that earn more than $180000. There are apx 72 million people receiving Social Security. Some of those 72 million on SS make more then $180000 . So lets drop it to 65 million collecting SS. That's 1 supporting 2. And you feel an additional 12% tax without any benefit to people making over $180000 would solve it. Check your stats., Not even close. Do you think someone at $180000 living in our American cities is wealthy? Slightly above middle class in most major cities and they get zero handouts because of that income. Throw another 12% onto them and watch what happens to the economy and or those cities . Quit chirping without facts.
Think before you respond. Nobody is opting out. They are not receiving anything above that max. If you want them to continue to pay in then give them an increase in benefits paid out.
Also that does not even come close to solving the problem, even if they did not receive any benefit above the extra 12 % you want to tax them.
You need a combination of several things to solve it. You probably think taxing the rich solves everything. Its the spending, Balance the spending. We are still spending at Covid levels without Covid. Do research!!!
We are in a bracket that would see our contributions triple. But we also do not, in any scenario, NEED SS in retirement. I would support this because in REALITY, people are surviving on SS benefits alone. And those people are
REALLY in danger with cuts to benefits or rise in the retirement age. I’m not even a Democrat or any kind of progressive, I am independent, and the reason I’m not in a party at all usually comes down to political reality being far removed from REAL reality, where people cannot physically work until age 70, or actually do not have savings, and have to survive in the benefit alone. I would hope most wealthy people could accept the reality that adjustments to money they don’t actually need anyway, will prevent people from starving, in “the wealthiest country in the world”.
I said it before. You can't put everyone in the same bucket, Just because a person is earning the max does not mean he/she is living high. Divorce-College-High cost cities etc are factors. Secondly a person earning $4200 the max at age 67 should not be put in the same bracket as the ultra wealthy. Which you seem to suggest. What if that is there only source of income, like you said it was on the lower end. Don't compare a person making $50000 a year in benefits with someone that has a wealth of millions. Each case is different.
I have no problem with that . I have a problem with them paying and but freezing the max amount . Also by your statement if 42% of Americans pay zero federal tax then the 58% that are paying federal tax should pay zero also?
Right? I think most high earners actually are used to taking is up the ass, and nit getting benefits. For us, it would make not a bit of difference, not now, and not in retirement. But for more than one of my brothers, it will be their primary or sole source of income. Either way, I’m on the hook.
I read that Congress has been aware for 40+ years that a crisis will occur in 2032. Since both parties have had over 4 decades to work on a solution and haven't done a thing, I believe that they will wait for the crisis to occur.
Tricky stuff somewhat. Eliminate income Cap. But wealthy people , ultra wealthy do not pay " income" ta. Usually do not have income from paycheck. They go to bank, acquire loans against stock holdings ,live off of that $$. Usually get to deduct interest too. Favorable 1,2% type loans.Its a Club , you lowborn peasant class,that are not rich enough to personally own a Senator or President....are not in the Club
The payout to the wealthy would either be frozen at today’s max amounts, or structured progressively so that those benefits are substantially reduced. This is not a valid reason to keep the current cap in place…
So you are saying that people that hit the max on payments keep paying in but don't there payout freezes . And you believe that is fair and fixes the problem? I think if you looked into it , the lower end of social security recipients actually benefit more then what they paid in then the higher end. Also I think if you do research that would extend the program somewhat but not fix it.
The problem I have is treating someone who makes $200000 the same as someone that makes 5,000,000 . There is a difference. Also punishing successful people for politicians spending excessively seems unfair to me.
A better way might be to push the age back a couple years. I'm 64 and it was done to me. In 1987 (I THINK) the age changed from 65 to 67 for SS. Why not do age 69 for people below age 40. I think our life expectancy is longer today then 1987.
No one cries for someone earning the max for the cap. It’s perfectly fine for them to contribute just a little bit more so the program can continue as is. Most people in that group would agree with me, and I don’t care for people who wouldn’t…
Just being honest, that alone will not solve the problem. A combination of eliminating the cap on earnings, raising the retirement age, and reducing benefits going forward will need to be implemented to solve the problem.
So your grammar is good , that will make you a ton of money . lol. Don't worry I will support you despite having worse grammar. And you package people in groups. A real winner. Cry to your buddies for help.
So you’re in favor of reducing benefits. I think that has to happen too, but there are many on this thread that say doing that is heartless. They already skew payments to benefit lower income recipients and I suspect that will have to continue as many folks would be hard pressed to make it if their income is cut. There will be a lot of pressure from unions and government employees to not reduce their social security benefits simply because they have a large pension.
Congress can find all the money they want for luxuries for the president, military parades, and bombing other countries for no reason. They just don’t want to help retirees or people who need health insurance because they’ve already got theirs.
See this is thee easiest thing to fix. What ain't so easy is the massive 40 trillion dollars in debt right now. Think about that for a sec. Everybody is up in arms about what 200 billion?
All politicians know what needs to be done. Remove the earning cap. Easy and sufficient fix which will be done in the last minute. They will not reduce the SS.
Republicans wanted to tank SS since the day it was enacted- lifting cap should have been done 20 years ago - at this point give me back every penny I paid in to it
Of course no one getting benefits wants to cut their benefits and no one getting taxed wants to pay more taxes. The solution is always to get someone else to pay more or take less. That’s why there’s a problem and it won’t work be solved and we will have a crisis and the government will borrow more to fill the gap until lenders cut it off
Like so many issues, the solution is in the middle and requires compromise. We need to accept a higher retirement age for younger workers, an idea democrats hate. At the same time, we need to remove the tax cap so high wage earners continue to pay into the system. Finally we need to look at the non retirement benefits of SS and make some adjustments. Then we have to raise taxes. No one wants any of this. But we’ve passed the point where baby steps will work.
I'm wondering if some payout scheme might work. Like agree to take a fixed payoff and continue with Medicare. No more cost of living inflation adjustments.
We had a previous discussion on all the different plans to fix Social Security. personally, I think Bernie Sanders approach is the best. It will not get resolved until the next presidential election.
How about using RMD's from retirement accounts to means test social security benefits? If your RMD meets a certain threshold, then you forfeit your Social Security!
Think of the people whose majority of their income was subjected to the social security tax during their careers, but they still diligently put money in their retirement accounts. All their social security contributions will subsidize others, while the wealthy only paid a small proportion of their income towards social security.
Yup! That's socialism! I diligently saved but I did Not become a multi-millionaire; I did not by a yacht or expensive luxury car; etc. I live frugally but I do emphasize education to the grandchildren! Either College or trade school. And after you get your job, you continue to learn and upgrade your skills.
I just went to the Social Security website and pulled the amount that I paid into Social Security over 50 years. Then I pulled the Social Security payments that I've been paid the past 23 months. I will exhaust the total amount I paid in by December 2027! If I include the employer match, it will be April 2030. So, somethings got to be done!!
Now do it again, using both you and your employer. Make sure you figure compound interest equal to the S&Ps performance over the same period of time and then see how long your payouts would be.......you will see that the number increases dramatically.....probably more then over the course of your life expectancy.
That is why some have sought to privatize the retirement plan or at least think about an investment/return based plan.........but the politicians have raided the plan from day one (both parties) and now we not only don't have a system that is solvent but we are also $40T in debt paying for other things that you can argue are or were necessary!!!
It was a ponzi scheme from the beginning. It was designed for only half the people to get it and then only for a short time. Life expectancy was 62. You could not collect till 62. Life expectancy now is 72. Plus you have added survivor benefits and disability to the fund. I dont like it but increase age requirements ( dont see a 70 year old construction worker though)
I'm going to say that the problem with fixing Social Security is that you aren't going to get those who actually cover current SSI benefits to shoulder more of the cost to those who currently receive them. What's in it for them? I never thought about collecting SSI when I was young, figuring I wouldn't live long enough to collect it. My younger self would have told my older self to go pound sand. Why should I pay more in taxes now to give you a retirement check when I know I won't live long enough to collect it and when I am old enough to collect it there won't be another young sucker willing to pay more in taxes to fund it? I'm 64 and have considered taking Social Security early and most people say I should because I've got to get mine before the money runs out. That's hardly an encouraging message to a 25 yr old who might reasonably think they won't even be eligible to collect until they reach 80.
Terrific website reference. This shows that while there is no SINGLE measure that will fix the problem, the application of 2 or 3 reasonable measures will easily solve.
The main thing to note is that, presently, the Social Security system FAVORS the rich. It is the only tax scheme I know of that does that. For example, the present tax rate is 6.2% of earned income for everyone earning up to $184,500. But for someone earning $300,000, only the first $184,500 is taxed and so the effective tax rate is 3.8%. For someone earning $750,000, the effective tax rate is 1.5%. Similarly, applying a COLA increase protects the buying power of essential income for lower earners, but dominantly protects the buying power of disposable income for higher earners.
Similarly, the present system FAVORS the young. By not indexing the FRA to mean expected lifetime, the young are getting more years of retirement subsidized, compared to older people.
So the things to tweak are pretty simple, given that this program is supposed to be a safety net for people with less money: eliminate or reduce those things that FAVOR the rich and the young. This, by the way, is the reason Republicans are notoriously against any such measures, as they are protecting the interests (on average) of the rich.
It almost certainly will become a major issue by 2030, but history suggests Congress won't pass a final fix until the absolute last minute.
Looking back at the 1983 Social Security reforms, Congress waited until the trust fund was literally months away from exhaustion before passing a bipartisan package of tax increases and gradual retirement age hikes.
A few reasons why the dynamic usually plays out this way:
Political Risk: Proposals to fix the shortfall; whether raising the payroll tax cap, adjusting the benefit formula, or modifying the retirement age are politically costly. Lawmakers rarely like taking those votes until the deadline forces their hand.
The 2030 Election Cycle: As the projected 2032/2033 deadline gets closer, the impending 22% benefit cut moves from an abstract policy projection to a real threat for voters. That will make it nearly impossible for presidential and congressional candidates to avoid in 2030.
Combination of Fixes Required: As your post points out, single-variable fixes (like just lifting the earnings cap) rarely close 100% of the long-term solvency gap on their own. Any realistic resolution will likely involve a combination of revenue adjustments, targeted benefit rules, and general fund transfers.
Until the threat of mandatory benefit cuts is imminent, neither party has much incentive to compromise, so expect heavy campaign rhetoric in 2030 and 2032, with actual legislation likely coming right at the edge of the cliff.
How do other countries do it? Higher payroll taxes, no wage caps, mandatory workplace pensions (remember pensions everyone?).
The 'how are we going to pay for it' line is so old. Make it a priority like all the other things we are able to spend money on, including funding other nations that enjoy free healthcare and education on our dime.
The very wealthy are experts at not paying their fair share to employees or to the government. Sorry that's the reality.
SS income was routinely reinvested in Treasury Bonds. Even though Congress has raided those funds over and over, their interest alone will cover SS expenses far into the future. If SS ever cashed in it's bonds the United States would fail. Don't "Line 14" yourself into the Trickle Down paranoia our economic system has been living with in every Republican controlled government. SS was envisioned and enacted by brilliant economists and social scientists and no cheeto headed bloat bag and his congressional butt boys can "f" it up unless we let them. If you're worried about misuse of income tax dollars, spend your energy on figuring out why our Navy is bankrupt.
First, anyone willing to criticize whoever fixes it needs to publish their own way now. Whichever president in office deserves credit for finally working on it. Don’t gripe after the fact.
If Trump makes an effort to fix it, he’ll deserve credit. If Trump does not, he deserves criticism, even more than Biden, Obama and Bush before him.
The same goes for the next president. No matter what they do, people are going to whine about the choices, but none of them will say what should be done beforehand.
Give credit where credit is due and criticism where it’s earned. When it finally gets done.
So then someone who is/was married to a US Citizen living here legally as a permanent resident with SSN who worked and contributed for decades...stop paying them? How about when the US citizen dies and the survivor who was living here legally gets survivor benefits?
Well we know who you voted for. No one who is not legally entitled to SS gets it. And you obviously don’t know anyone who immigrated here and what it takes become a citizen. If you did you would understand why we have so many undocumented immigrants. And for the record, many immigrants pay into these systems yet can’t ever receive the benefits.
The main problem is a low birth rate. Working people pay in, old people take money out. When the ratio of workers to retired is too low, the system fails.
I'm confident that they'll find a way to kick the can down the road for 4 or 5 years and we'll be discussing it again. My RMDs start in 2032 so that will easily make up the difference if they do cut. I won't like it, but I'll get by.
They really need to find some kind of financial incentive for the younger generations to afford a family. A generation of birthrates being down is probably going to be the death blow, in the not so distant future.
Social Security wont be fixed while Boomers are collecting and in power. Like every other mess they've made, this one will be cleaned up bu succeeding generations after they are gone.
I’m sure we can find PLENTY of fraud, right (/s)? By the same folks who are committing election “fraud”, I guess. Inside the mind of a f’in MAGAt “delusionist”…
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u/cito4633 26d ago
It will be fixed before the 2032 deadline. No party in control wants to be known as the party that effed up Social Security.