30 options for reforming Social Security (and how much each will save)

[yllus]

I don't have commentary on this topic because it doesn't interest me (not American), but it looks like it might be very interesting for those of you who do care about Social Security. Sounds like you've got a lot of options! Enjoy.

30 options for reforming Social Security -- and how much they'll save

This chart comes from the Congressional Budget Office's report on 'Policy Options in Social Security,' and it shows both what people think they are, and how much they'll save.

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Straightforward options like raising the retirement age and applying payroll taxes to all income get the most attention, as people can actually understand them. But for that exact reason, I'd guess that more opaque changes, such as "progressive price indexing," which ties benefits to prices rather than earnings, are more likely.

 

[dullard]

There is one and only one true fix. That is change the retirement age. People keep living longer, and you can't just keep the retirement age slowly increasing like it is now. Imagine if people lived to be 200 years old. You can't expect them to work from age ~20 to ~67 (47 years) and expect to be able to live the other 153 years mooching off of others. No formula change, tax change, or benefits change can work long term. Only a retirement age change is a true solution.

When social security was started, the retirement age was HIGHER than the life expectancy. We have severely warped it from that position.

 

[JS80]

Phase out Social Security. Save 100%.

 

[Phokus]

Soylent Green?

 

[EagleKeeper]

There is one and only one true fix. That is change the retirement age. People keep living longer, and you can't just keep the retirement age slowly increasing like it is now. Imagine if people lived to be 200 years old. You can't expect them to work from age ~20 to ~67 (47 years) and expect to be able to live the other 153 years mooching off of others. No formula change, tax change, or benefits change can work long term. Only a retirement age change is a true solution.

When social security was started, the retirement age was HIGHER than the life expectancy. We have severely warped it from that position.

Because people live longer does not mean that they are able to work longer.

People retiring allows movement upwards which allows people to come in at the bottom of the ladder.

You also have companies/government that have determined that a person is useless as a full time employee after x years on the job or such an age.

That thinking has to be reversed to allow people to work untill 70 or 75 if able.

 

[dullard]

Because people live longer does not mean that they are able to work longer.

People retiring allows movement upwards which allows people to come in at the bottom of the ladder.

You also have companies/government that have determined that a person is useless as a full time employee after x years on the job or such an age.

That thinking has to be reversed to allow people to work untill 70 or 75 if able.

That thinking is why France is striking TODAY about moving their retirement age from 60 to 62. Oh no, they can't possibly be able to work when they are 61! Gasp, the horror! People are just too frail and their brains are mush at that venerable old age of 61. Greece probably says the same thing when you hit 51 (580 jobs are too dangerous to keep working after 50 for women). Somewhere else someone probably thinks 30 is too old to work.

Face reality. People in their late 60s are almost uniformly capable of working. Those who can't work can get disability.

It is sad, but this cuture of retiring for 20-30 years was a one time fad. It cannot and will not continue. We no longer have such a strong worker/population ratio. That peaked a couple years ago. It is expected to never return. That means more and more people not working for every person left working. The cure would be to have a population boom, but a population boom actually harms short-term since we have even more people of age 0-20 not working and a population boom harms long-term since it dilutes our resources (not to mention it just creates another but bigger retirement boom problem in 60 years). Thus, this long retirement "right" was a brief period in our golden age that is unlikely to continue.

Tweaking the tax rate is unfeasible (in the long term) and if you tweak benefits enough to make it feasible, then you are essentially killing social security and get the much worse ills that would cause.

The only way to avoid the ills of no social security and to have a meaningful safety net is to have that safety net reserved for those who can't work. Retirement at 75 is a reasonable age right now. It may need to be changed as we live longer.

True, people need to change their thinking. But just ignoring the real problem (a retirement age that is unfeasibly low) until it explodes isn't the best way of changing their thinking.

 

[Infohawk]

Dullard and Eaglekeeper both have points. I don't think we can support people retiring at 65 and dying at 90. But looking around I'm not sure it's that easy for older people to keep working for that long. Medicine has mainly focused on preventing death and controlling diseases (as opposed to curing them). The older people get, the more worn out they are and the more conditions they suffer from. It also seems like many workers just get more tired. Part of the problem is that our work culture is screwed. In America, its' too demanding for almost everyone at the higher levels.

The best solution is to de-couple benefits from jobs. That way, people of all ages will be more likely to be employed and employers can offer more flexible working situations. A 70 year old should be able to work, but it's gonna' be hard to keep up with a 30 or 40 year old. An uneducated 70 year old might work at a coffee shop, while an educated 70 year old could tutor or consult part-time.