Calls to Embrace Reform
But many economists and financial experts say that public policymakers need to embrace reform.
“What we need is not just a smart Social Security fix, but we need to have a radical reform of our fiscal system,” Kotlikoff said. “It’s not doodling around the current system.”
Indeed, he has proposed several different measures that Washington could institute to keep the Social Security system intact through what he calls a “Personal Security System.”
Kotlikoff has recommended phasing out the existing Social Security system while paying off all accrued obligations to current retirees and workers and “replacing it with a fully funded, progressive retirement account system.”
As for immediate solutions, Doug Carey, a chartered financial analyst, said a change to the payroll tax would be appropriate, although it would be hard to pass in Congress.
“Currently, the payroll tax for both employees and employers is 6.2 percent for Social Security,” Carey told The Epoch Times.
“Increasing this rate would help with the solvency of the trust fund but would be difficult to pass in Congress since it would raise taxes on most people.”
Another policy adjustment, according to Carey, is increasing the payroll tax cap.
“This is the most popular idea,” he said.
“Currently, only earnings up to $168,600 are subject to Social Security taxes. Raising or completely eliminating this limit would go a long way toward increasing the solvency of the trust fund.
“It is also more likely to pass Congress since it only hits a small percentage of workers.”
Revisions to methodology could also serve as a prescription to help keep Social Security afloat, according to Tyler Meyer, a certified financial planner and the owner of QED Wealth Solutions.
“Another approach is to modify the benefit formula to slow the growth of benefits for higher earners while protecting lower-income beneficiaries,” Meyer told The Epoch Times.
“Policymakers might also consider introducing a means-testing system, where benefits are reduced or eliminated for individuals with substantial retirement income from other sources.”
www.zerohedge.com/political/social-security-facing-63-trillion-unfunded-liabilities