Alicia Munnell started the Boston College Center for Retirement Research in 1998. As she prepares to leave, she says fixing Social Security should be a priority now.
Excerpts from NY Times interview -
Is the problem that wealthier people would pay significantly more into the system without getting increased benefits?
The reason Social Security has survived is that everybody buys into it, and everybody gets something from it. You could say, “We want Bill Gates to pay the payroll tax on all his earnings up to multimillion dollars,” but then we’re not going to give anything in return. I worry that breaking that link changes the fundamental nature of the system. Raising the cap to around $300,000 captures about 90 percent of total earnings, and then you need some other changes to maintain the current benefit levels.
Another suggestion to cope with the projected shortfall is to raise the age for collecting Social Security. Would that work?
Proposals to delay the full retirement age are based on the notion that life expectancy has increased. Life expectancy has increased, but primarily for those in the top half of the income distribution. People with lower levels of education, minorities, particularly Blacks and other vulnerable groups, haven’t seen the gains in life expectancy over the last two, three or four decades.
Social Security is called the “third rail” of American politics, and retirees are potent and active voters. Is it realistic to think that sometime after 2033 Congress would cut retirement benefits?
Raising revenue would be politically a very hard thing to do, because it means raising taxes now for something that won’t happen until 2033. But I think it’s harder to conceive of the situation where Congress would allow across-the-board cuts to retirement benefits.
Link to full interview - https://www.nytimes.com/2024/12/27/busi ... llege.html
BobK
Excerpts from NY Times interview -
Is the problem that wealthier people would pay significantly more into the system without getting increased benefits?
The reason Social Security has survived is that everybody buys into it, and everybody gets something from it. You could say, “We want Bill Gates to pay the payroll tax on all his earnings up to multimillion dollars,” but then we’re not going to give anything in return. I worry that breaking that link changes the fundamental nature of the system. Raising the cap to around $300,000 captures about 90 percent of total earnings, and then you need some other changes to maintain the current benefit levels.
Another suggestion to cope with the projected shortfall is to raise the age for collecting Social Security. Would that work?
Proposals to delay the full retirement age are based on the notion that life expectancy has increased. Life expectancy has increased, but primarily for those in the top half of the income distribution. People with lower levels of education, minorities, particularly Blacks and other vulnerable groups, haven’t seen the gains in life expectancy over the last two, three or four decades.
Social Security is called the “third rail” of American politics, and retirees are potent and active voters. Is it realistic to think that sometime after 2033 Congress would cut retirement benefits?
Raising revenue would be politically a very hard thing to do, because it means raising taxes now for something that won’t happen until 2033. But I think it’s harder to conceive of the situation where Congress would allow across-the-board cuts to retirement benefits.
Link to full interview - https://www.nytimes.com/2024/12/27/busi ... llege.html
BobK
Statistics: Posted by bobcat2 — Fri Dec 27, 2024 2:23 pm — Replies 0 — Views 29