Alicia Munnell, former director at the Center for Retirement Research at Boston College and one of America’s top thought leaders on retirement policy, published a proposal for extending the long-term solvency of Social Security for the next 75 years and beyond.
The proposal includes 17 policy changes that mix benefit cuts and revenue increases.
On the revenue side, Munnell suggests:
- Increasing the maximum amount of income that taxpayers must pay the Social Security tax from its current level of $168,000 to $300,000.
- Increasing the payroll tax from 12.4 percent to 12.6 percent.
- Taxing full benefits for individuals making $100,000 or more annually.
The major benefit cut is an increase in the full retirement age for the top 40 percent of earners.
- The other two benefit cuts include extending the period for calculating average earnings from the highest 35 to highest 40 years and phasing out the dependent spouse’s benefit, recognizing the increased participation of women in the labor force.
What they’re saying: Let’s just enact this balanced, thoughtful, workable proposal,” says Munnell. “It would restore confidence in the system both for the young, many of whom believe they will never receive benefits, and for older workers and retirees who fear their benefits will be cut. It would eliminate fear mongering and misinformation. It would make Americans happier.”
