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<blockquote data-quote="Wally" data-source="post: 5867989" data-attributes="member: 46212"><p><h2><span style="font-size: 15px">From Money.com</span></h2><h2><span style="font-size: 12px">How to fix Social Security</span></h2><p><span style="font-size: 12px">Here are five ways Social Security's financial challenges could be addressed so that it can pay out all scheduled benefits, according to the actuaries' report:</span></p><p></p><h3><span style="font-size: 12px">1. Increase payroll taxes</span></h3><p><span style="font-size: 12px">The payroll tax for Social Security, which is paid by workers and employers, could be hiked 25% in 2034 to make up the difference. That would be an increase from the current rate of 6.2% up to 7.75%. However, the report notes that this could be unaffordable for low-income Americans without additional changes to their federal income taxes. Gradual payroll tax increases, therefore, would be less disruptive.</span></p><p></p><h3><span style="font-size: 12px">2. Tax high earners more</span></h3><p><span style="font-size: 12px">Americans with high incomes <a href="https://money.com/millionaires-social-security-taxes-income-cap/" target="_blank">do not pay Social Security taxes</a> after a certain point — for 2023, the threshold is $160,200. The actuaries note Congress could consider the option of taxing all earned income. <strong>Removing this cap, however, would only make up for 78% of the projected shortfall.</strong></span></p><p></p><h3><span style="font-size: 12px">3. Add new tax sources</span></h3><p><span style="font-size: 12px">The report floats the possibility of taxing investment income to fund Social Security or increasing estate and gift taxes. But it points out that not only has this not been done before, it also is likely to face resistance.</span></p><p></p><h3><span style="font-size: 12px">4. Reduce benefits for high earners</span></h3><p><span style="font-size: 12px">Congress has long adhered to a tradition of not cutting benefits for people already getting paid, but the report details several options to potentially reduce benefits for high-earning Americans who are <em>not yet</em> eligible for Social Security.<strong> However, these measures would be insufficient to fix the 2034 shortfall.</strong></span></p><p></p><h3><span style="font-size: 12px">5. Raise the retirement age</span></h3><p><span style="font-size: 12px">Americans become eligible to take Social Security at 62, though benefits increase the longer you wait until age 70. The report considers several ideas for increasing retirement ages to address the shortfall, including gradual approaches that (theoretically) wouldn't feel grossly unfair to people in different age cohorts. But raising the retirement age would be especially painful for low-income Americans and anyone who works a physically demanding job.</span></p></blockquote><p></p>
[QUOTE="Wally, post: 5867989, member: 46212"] [HEADING=1][SIZE=4]From Money.com[/SIZE][/HEADING] [HEADING=1][SIZE=3]How to fix Social Security[/SIZE][/HEADING] [SIZE=3]Here are five ways Social Security's financial challenges could be addressed so that it can pay out all scheduled benefits, according to the actuaries' report:[/SIZE] [HEADING=2][SIZE=3]1. Increase payroll taxes[/SIZE][/HEADING] [SIZE=3]The payroll tax for Social Security, which is paid by workers and employers, could be hiked 25% in 2034 to make up the difference. That would be an increase from the current rate of 6.2% up to 7.75%. However, the report notes that this could be unaffordable for low-income Americans without additional changes to their federal income taxes. Gradual payroll tax increases, therefore, would be less disruptive.[/SIZE] [HEADING=2][SIZE=3]2. Tax high earners more[/SIZE][/HEADING] [SIZE=3]Americans with high incomes [URL='https://money.com/millionaires-social-security-taxes-income-cap/']do not pay Social Security taxes[/URL] after a certain point — for 2023, the threshold is $160,200. The actuaries note Congress could consider the option of taxing all earned income. [B]Removing this cap, however, would only make up for 78% of the projected shortfall.[/B][/SIZE] [HEADING=2][SIZE=3]3. Add new tax sources[/SIZE][/HEADING] [SIZE=3]The report floats the possibility of taxing investment income to fund Social Security or increasing estate and gift taxes. But it points out that not only has this not been done before, it also is likely to face resistance.[/SIZE] [HEADING=2][SIZE=3]4. Reduce benefits for high earners[/SIZE][/HEADING] [SIZE=3]Congress has long adhered to a tradition of not cutting benefits for people already getting paid, but the report details several options to potentially reduce benefits for high-earning Americans who are [I]not yet[/I] eligible for Social Security.[B] However, these measures would be insufficient to fix the 2034 shortfall.[/B][/SIZE] [HEADING=2][SIZE=3]5. Raise the retirement age[/SIZE][/HEADING] [SIZE=3]Americans become eligible to take Social Security at 62, though benefits increase the longer you wait until age 70. The report considers several ideas for increasing retirement ages to address the shortfall, including gradual approaches that (theoretically) wouldn't feel grossly unfair to people in different age cohorts. But raising the retirement age would be especially painful for low-income Americans and anyone who works a physically demanding job.[/SIZE] [/QUOTE]
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