Medical costs represent a tough retirement planning challenge with no easy solutions. Social Security is a Ponzi scheme.
At that time, ongoing tax collections from workers will pay for approximately 88 percent of HI benefits. However, SMI costs are projected to grow from 2. Yet together they form the twin pillars of financial security for retirees.
Of course, you can analyze many other combinations. If this tax cap was gradually eliminated between and it would reduce the deficit by 71 percent.
A little more than one-third of the gap could be closed by reducing future cost-of-living adjustments for current retirees by 0. Another potential Social Security change is to reduce or eliminate Social Security benefits for people who have retirement incomes above a certain threshold.
In reality, neither of those solutions is simple, since raising taxes is never a popular political decision, and cutting Social Security benefits will negatively affect millions of retirees. If that tax rate was gradually increased to 7. Opponents of privatizing Social Security list several reasons why they think it would do more harm than good: If an alternative measure of inflation, the chained CPI-W, were used it would decrease the annual cost-of-living adjustment by an average of about 0.
Would you treat older workers differently from younger workers? Supporters of this plan say that stock market gains will offset future deficiencies in the Social Security system.
Reduce future cost-of-living adjustments for current retirees by 0. Social Security is efficient, spending slightly more than half a cent out of every dollar paid out on administrative costs. Private Social Security accounts used in other countries waste as much as 15 cents per dollar [ ref ].
Why not take a shot at coming up with your own solution? Bush has also offered another plan which he calls "progressive indexing. The full retirement age at which workers can collect unreduced Social Security benefits is currently scheduled to increase to 67 for everyone born in or later.
Improve efficiency in the medical care delivery system, so that it takes less money to care for retirees and beneficiaries. So even though the dollar numbers are quite large, the percentage deficits are quite small and could be fixed with moderate increases in revenue or restraints on benefits.
The end result would be an overall cut in benefits, with higher-income workers bearing most of the cuts over time. Increase income taxes paid to the general federal fund to support benefits paid for Parts B and D. Lawmakers have a broad continuum of policy options that would close or reduce the long-term financing shortfall of both programs.In theory, there are two easy answers to any budget problem: increase income (in this case, raise the percentage taken out of workers' paychecks for Social Security) or reduce spending (in this case, cut the amount paid out in Social Security benefits).
In reality, neither of those solutions is. Feb 18, · The Social Security trust fund is expected to be exhausted in After that, there will be enough tax revenue coming in to pay out about three quarters of promised benefits.
However, a few. Here are some solutions. How to fix Social Security. Sonya Stinson.
February 11, Crisis or not, we saw Social Security’s financial. A A MERICAN ACADEMY of ACTUARIES Solutions to Social Security’s and Medicare’s Financial Problems Public Policy Monograph Spring Sep 22, · The common solutions for solving the Social Security shortfall generally fall into two camps: cut benefits or raise revenue.
The good news is that we're only asking you to solve it for Medicare funding: Problems and solutions. Share; Tweet Medicare's funding problems often get overlooked when the Social Security trustees issue their annual report on the funded status of the Founded: Sep 18,Download