I’m asked almost daily how scared I am about the Republicans destroying Social Security. I am not. I wish the media would stop making this this their favorite clickbait.
As long as people are still working (and paying payroll taxes), Social Security will survive. Your benefits will be reduced, but the program will remain.
The truth is, BOTH parties will have to make changes for the program to survive. When Social Security began, the age to receive full benefits was 65. In the 1930s, the average life expectancy was 59. Not many people were expected to live long enough to collect Social Security. Now, we have a flipped situation where everyone expects to collect benefits and life expectancy is 79.11 years in the United States.
In the 88 years since Social Security began, it has undergone many changes. Times change and the programs must evolve. President Biden has proposed raising the payroll tax on those making over $400,000. Most people think that the payroll tax hits every dollar. It doesn’t. Medicare payroll taxes you no matter how much you make, but FICA for Social Security tops out this year at $160,000. This amount does go up slightly each year, and eventually it will be $400,000 and this donut will be closed.
This is an easy way to bring in money without upsetting 99 percent if the population.
Regardless if this change is approved or not, something has to be done. Harder fixes are reducing benefits or raising the age of full retirement. Both of those would be so unpopular that Congress would most likely not phase the changes in for years so as not to be punished at the ballot box.
The United Kingdom is a great example. They agreed to move their retirement age up to 68, but it won’t phase in until 2046. Since people are living longer and the age of full retirement should move up accordingly, Estonia passed a law to tie the full retirement age to average life expectancy.
In Russia, women qualify for retirement five years before men (55.5 versus 60.5). Since every country is struggling with this same issue, expect to see the rest of the world follow the path of the UK.
Sylvia Gordon is co-founder of The Medicare Family, headquartered in Noblesville, where she educates thousands on Medicare and Social Security in all 50 states. You can learn more at TheMedicareFamily.com.