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- Oct 3, 2020
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Actually, it is projected to become insolvent by 2035 if the basic structure is not changed (meaning a reduction in benefits or an increase in SS taxes). This means SS would not be able to pay all their obligations without structural changes. That is the definition of insolvency.Social security is not plotted to be insolvent, just to have used up the head start that we've been putting into it to pay off the baby boom. Then it goes back to normal financing from payroll taxes.
Yes, the solution is dead simple in theory. But, from a practical matter, it's going to be very difficult to get the Republicans to agree to raise SS taxes so it doesn't become insolvent. Their preferred solution is to cut benefits (or eliminate SS entirely). This is something I would not ignore if I was behind on my retirement savings.Tiny fixes, like letting all income apply (or just let the cap float on inflation) would solve the financing problem. It's a pretty simple problem.
It's easy to hope or dream that SS will be sufficient for retirement but that is unlikely to be the case by 2035. Even now, many retirees without sufficient savings are having difficulty making ends meet on current S.S. benefits.