Goodbye to cuts in Social Security checks. If these changes are made, everything will change in benefits

The Social Security deficit has been known for years. Congress has yet to implement the measures that have been proposed because of resistance from other parties.

Since 2021, the program has been in deficit, and by 2035, trust funds that pay Social Security benefits could go bankrupt. This would drastically reduce scheduled benefit payments, so that benefits might be cut by at least 17% in ten years, even if benefits would still be paid.

There is still time to implement the necessary changes, though, and if voters are to be believed, a number of the recommendations could be advantageous to both parties. According to a recent survey conducted by the University of Maryland’s Program for Public Consultation (PPC), establishing a number of widely accepted perspectives could help close the gap.

1. Make income over $400,000 subject to Social Security s payroll tax

Employers and employees contribute 6.2% of wages to Social Security, which is primarily financed by payroll taxes. The yearly cap is $168,600 in 2024 and $172,000 in 2025. It was decided to exempt income over a specific threshold from Social Security taxes due to the program’s restricted scalability.

Since those with the lowest salaries now bear the worst tax burden, a proposal has been made to expand the payroll tax to earnings over $400,000 in order to make payments more equal. If accepted, the proposal may make up 60% of the program’s budget deficit. With 89% of Democrats and 87% of Republicans supporting the initiative, the University of Maryland’s PPC survey revealed substantial bipartisan support. This can be an excellent place to start, but it does not guarantee that the policy will be put into effect.

2. Raise the Social Security payroll tax rate to 6.5% over six years

Another proposal calls for a 6.2% payroll tax on both employers and employees, for a total rate of 12.4%. 15% of the program’s funding gap would be closed if this rate were raised progressively over six years to 6.5%. Both major political parties favor this concept 87% of the time, according to the University of Maryland’s PPC. The long-term aggregate benefit could be substantial, but the individual impacts would be minimal.

3. Gradually raise full retirement age to 68 by 2033

Employees must wait until they reach full retirement age (FRA) in order to collect their full main insurance amount (PIA), although they can begin receiving Social Security retirement benefits at age 62.The FRA is 67 for those born in 1960 or later, and an early benefit application results in a smaller award. According to the University of Maryland’s PPC, 88% of Democrats and 91% of Republicans would support raising FRA to 68 by 2033, which would solve 15% of the program’s funding gap.

4. Reduce benefits for workers with income in the top 20%

A worker’s lifetime income is divided into two bend points, and each portion is given a different percentage in order to calculate Social Security benefits. 90% of revenue is now distributed below the first bend point, 32% between the first and second bend points, and 15% above the second bend point according to the current procedure. It may be possible to close 11% of the program’s budget deficit by lowering the highest percentage for the top 20% of earners to 5%. The Public Policy Center at the University of Maryland reports that 92% of Republicans and 93% of Democrats support this approach.

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