WASHINGTON, DC – Social Security, the foundation of economic security for millions of America’s seniors and working families, can be made more adequate and solvent for the long term, according to a new report released today by the National Academy of Social Insurance (NASI).
The report, Fixing Social Security: Adequate Benefits, Adequate Financing, outlines approximately 30 options for putting the program’s finances into 75-year balance and more than 10 ways to make Social Security more adequate for those who rely on it. All options have long-range cost estimates from Social Security actuaries.
“Fixing Social Security is a manageable job. While Social Security does not need more money now, policymakers could act now to make funds available in the future when the money will be needed,” said Virginia Reno, co-author of the report and Vice President for Income Security at NASI.
“We also need to consider the adequacy of Social Security benefits,” said Janice Gregory, president of NASI. “Long-term shifts in private retirement plans are placing more risks on individual workers. Recent losses in jobs, home equity, and individual savings are weakening all other sources of financial security in retirement. Only Social Security has held its value. Yet benefits remain modest for all, and inadequate for some especially vulnerable populations.”
Benefit adequacy options in the report target such financially vulnerable groups as:
The oldest beneficiaries (over 85 years);
Widowed spouses of low-earning couples;
Low-paid workers generally;
Workers with gaps in paid work due to childcare; and
Students in college or vocational school who have lost parental support due to death or disability. Other adequacy options would increase benefits across the board for current and future beneficiaries. Options to balance Social Security’s future finances include:
Lifting the cap (now $106,800) on the earnings from which workers and employers pay Social Security taxes;
Broadening the base for Social Security taxes;
Scheduling modest rate increases in the future when funds will be needed;
Dedicating progressive taxes to pay part of Social Security’s future cost; and
Gradually lowering some future benefits.
A recent survey conducted by the Benenson Strategy Group (BSG) for NASI and the Rockefeller Foundation found that Americans want to preserve and improve Social Security, even if it means paying higher taxes to do so. “Even before the recession, fear of an insecure retirement was among Americans’ top economic concerns,” said Danny Franklin of BSG. “Those fears have only intensified in the past year. Americans today are willing — even eager — to invest in the peace of mind that Social Security provides.”
The NASI project receives support from the Ford Foundation’s initiative on Economic Fairness and Opportunity and the Rockefeller Foundation’s Campaign for American Workers.
The National Academy of Social Insurance (NASI) is a non-profit, nonpartisan organization made up of the nation’s leading experts on social insurance. Its mission is to promote understanding of how social insurance contributes to economic security and a vibrant economy.