A number of Americans, politicians and advocates see the Social Security issue as simply increasing benefits to boost senior incomes or to trim benefits or raise taxes to keep the program solvent. It’s not that simple.
We should be looking at ways to address overall retirement incomes, a changing workforce, and increasing life expectancy. All this cannot be done simply by raising taxes on working Americans.
Consider this article.
Promoting Economic Growth through Social Security Reform
SEP 19, 2019 | SOCIAL SECURITY BY MARC GOLDWEIN, MAYA MACGUINEAS, AND CHRIS TOWNER
As the population ages and an increasing share of Americans exit the workforce for retirement, economic growth is projected to slow considerably. The aging of the population also undermines retirement security and puts the Social Security program at risk.
Due to the increasing number of beneficiaries relative to workers, Social Security spending already exceeds revenue. By 2035, the program’s trust funds will be exhausted, triggering an automatic 20 to 25 percent across-the-board benefit cut under current law. Social Security spending and revenue must be brought in line to prevent insolvency.
However, a thoughtful Social Security reform plan should go beyond simply assuring actuarial soundness by also improving retirement security and economic growth. In particular, Social Security reform should increase national income by promoting work, investment, and fiscal sustainability.
In this paper, we propose a Pro-Growth Social Security Reform framework, which would both shore up Social Security and grow the economy at a faster pace.
Our framework includes four parts:
✔️Promote delayed retirement and productive aging by increasing Social Security’s retirement ages while insulating vulnerable workers with an Age 62 Poverty Protection Benefit (62-PPB) to boost benefits for low-income workers.
✔️Reward work at all ages by counting all years of work toward benefits and by calculating benefits based on each year’s earnings rather than average 35-year lifetime earnings.
✔️Increase savings and investment by automatically enrolling workers in add-on “Supplemental Retirement Accounts” (SRAs) and placing a share of wages, on top of the payroll tax, in those SRAs unless a worker chooses to opt out.
✔️Improve certainty and sustainability by making Social Security sustainably solvent through a mix of progressive revenue and benefit adjustments.