Use The Social Security Reformer to Prevent Insolvency
Time is running out to save the Social Security retirement trust fund from insolvency in less than six years and a 22% across-the-board benefit cut. Luckily, there are plenty of options available for lawmakers to enact the benefit and revenue changes necessary to achieve solvency for the next 75 years – and you, too, can have your hand at how to do it with our recently updated Social Security Reformer. This online, interactive tool allows users to explore different policy mechanisms to prevent Social Security’s looming insolvency and bring the program into long-term financial balance.
Check out CRFB’s updated Social Security Reformer which includes:
- New options to raise revenues and slow the growth in benefits – including novel ideas to cap benefits at $100,000 and overhaul taxation of benefits from our Trust Fund Solutions Initiative.
- Updated estimates based on the latest projections from the Social Security Trustees.
- Real-time visual displays and graphics.
The Social Security Trustees project that the program’s retirement trust fund will become insolvent in 2032. That is when today’s 61-year-olds will reach their normal retirement age and when today’s youngest retirees turn 68. Even if Social Security’s retirement and disability funds were theoretically combined, Social Security would become insolvent in just eight years.
The stakes of insolvency are high – if the retirement trust fund empties, the law calls for benefits to be limited to incoming revenues, meaning a 22% cut for retirees or the equivalent of a $16,900 annual benefit cut for a typical couple retiring shortly after insolvency.
With the Social Security Reformer, you have the power to save Social Security for generations to come. Your goal is to prevent the trust fund from depleting its funds and to close the program’s 75-year funding gap, all while keeping the program in balance through the end of the century. The Reformer tracks your progress in achieving those goals with interactive, real-time displays of how your evolving policy proposal improves solvency and affects year-by-year trust fund balances, spending, and revenue.
The latest update provides options to improve solvency through changes to Social Security’s benefit formula, increases in the retirement age, reforms to cost-of-living adjustments, raising the payroll tax cap, broadening the payroll tax base, and reforms to income taxation of benefits. The Reformer also gives you options to improve work incentives, make targeted benefit reductions, and even enhance benefits. You can also input custom changes in the payroll tax rate and initial benefits.
The updated Reformer also includes novel solutions from our Trust Fund Solutions Initiative in addition to those added in last year's update. Among these are a Six Figure Limit for Social Security, an option to tax 100% of Social Security benefits, and a reform to tax Social Security contributions instead of benefits.
It is vital that policymakers act quickly to rescue Social Security from insolvency. Our Social Security Reformer shows that many different paths to reform exist.
Click here to design your own solution to save Social Security.
