Social Security Tweaks and Their Projected Savings
Posted 05/04/05
Social Security will face a shortfall of about $4 trillion over the next 75 years. The Social Security Administration has prepared a partial list of proposals that would generate savings, mostly through tax increases and benefit cuts. The following is a list some possible proposals or reforms and their anticipated savings.
| Projected 75-year shortfall |
$3,991 billions |
| Proposals and their projected savings |
|
| Eliminate wage cap without changing benefits | $4,646 billions |
| Raise payroll taxes by 2% | $4,139 billions |
| Eliminate wage cap and increase benefits | $3,696 billions |
| Phased-in benefit cut for middle and upper Income earners |
$3,400 billions |
| Reduce the COLA by 1% | $3,188 billions |
| Invest 40% of Trust funds in equities 6.5% return |
$1,922 billions |
| Reduce COLA by .5% | $1,668 billions |
| Make 90% of earnings subject to payroll tax, Increase benefits |
$1,584 billions |
| Change retirement age to 67, then gradually to 70 | $1,436 billions |
| Invest 40% of Trust funds in equities, 5.5% return | $1,394 billions |
| Reduce benefits by 5% for new retirees | $1,228 billions |
| Change retirement age to 67, then gradually to 68 | $1,098 billions |
| Increase number of years to calculate basic benefit from 35 to 40 |
$ 887 billions |
| Reduce benefits by 3% for new retirees | $781 billions |
| Tax benefits as private pension income | $697 billions |
| Increase years to calculate benefits from 35 to 38 | $549 billions |
| Include new state and local government employees | $ 444 billions |
| Increase retirement age to 67 | $296 billions |
