Ways to Fix Social Security's Funding Shortfall

Social Security is necessary to our elderly’s financial security and roughly “pays out $800 billion a year in benefits”. Lately, however, the conversation surrounding the SSI program has been one filled with uncertainty because soon there will be more citizens withdrawing funds from the pot than those who are putting in. In the article, “Ways to Fix Social Security's Funding Shortfall” we are given three modifications that could improve the social security system’s efficiency and sustainability for the future.

This first proposal is to increase the retirement age to 70 years old. Citizens can freely retire before this age, but they must retire using their own personal savings. The problem I foresee with this idea is that there are many citizens who do not have a huge retirement savings plan set up for themselves. Most retirees depend on SSI to keep them above the poverty line which means they may not have enough privately saved to keep them afloat until they reach the required beneficiary age. Consequently, these elderly men and women would have no choice but to keep working until they reach age 70 which is absurd for a developed country. In my opinion, the age should stay around 65-66 and the elderly should receive the money they deserve because when it’s our turn to retire we will want the same in return.

The second idea to increase social security funds is to reduce the cost of living by 0.3 percent. It seems to me that this is equivalent to the government deciding to lower minimum wage based on what they think the cost of living is. It’s not fair and the cost of living is actually going up not down so morally I think we should pay retirees accordingly.

The last plan is to raise the wage ceiling which would increase how much of each workers’ salary can be taxed. The 2018 base tax is $128,400 so an individual who earns this or more will contribute a yearly $7,960.80. I really like this idea as opposed to the former two because those who make more can afford to pay more and it makes the SSI program more progressive instead of regressive. Also, according to the textbook, there was only 2.8 workers for every beneficiary in 2014 (222) so if there are fewer people in the workforce they we will have to pick up the slack. And in the end, these larger inputs will be recuperated by the workers when they retire.