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The Only Way to Save Social Security

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Millions of retirees depend on benefits from Social Security to provide for their living expenses. But the Social Security Administration projects that it won't be able to pay full benefits in the future. A wide range of choices could help close the financial gap, but they all involve sacrifices from some group of Americans.

A recent survey from the NORC Center for Public Affairs and AP polled those 50 or older for their opinions on what changes, if any, they'd support to help save Social Security. In the following video, Dan Caplinger, the Motley Fool's director of investment planning, looks at the survey's results, noting that, of the four choices considered, the only one that got a majority of support was raising the maximum earnings on which workers have to pay Social Security payroll taxes. Right now, wages up to $113,700 each year are subject to payroll taxes for Social Security, with employees paying 6.2% of their salary, and employers paying another 6.2% on their workers' behalf. By a 61% to 25% margin, those surveyed supported raising that $113,700 amount.

Dan goes on to note that other alternatives didn't get nearly as much support. Views on means testing Social Security benefits were almost evenly split between those in favor, and those against. Twice as many people opposed raising the retirement age as supported it, while three times as many people were opposed to changing the way the cost-of-living increases were done. With no easy solution, Americans can expect the debate to continue for a long time.

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Read/Post Comments (19) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 08, 2013, at 10:08 PM, colin2862 wrote:

    The easiest way to save social security is for the treasury to pay back in the money they took out, $2.5T, of course that would mean even more money printing, or even worse reversing the tax cuts and government spending that it was borrowed to fund by Reagan et al. If by some amazing measure they do pay the money back in, lets hope they run out and buy some commodities as stocks are about to go bang, and the USD is not far behind. Of course if you listen to the wall street funded politicians, and "Think Tanks" the answer is to privatize it, so Wall Street can steal it all.

  • Report this Comment On November 09, 2013, at 12:06 AM, Rena1970 wrote:

    One way to boost Social Security and Medicare funding is for the IRS to audit entities such as S corporations for distributions taken. A considerable number of shareholder-owners take little or no salary, but large distributions. Salaries are subject to payroll taxes. Distributions are not. The IRS has won around 99% of the cases in which they challenged the nature of funds taken out of such entities.

  • Report this Comment On November 09, 2013, at 6:51 AM, lyfsavr118 wrote:

    Disability requirements should be stiffened so folks who get their feelings hurt at work can't receive SSDI benefits. Disabilities should be legitimate, life altering changes. Also, if Social Security would quit paying people that report they went back to work in a timely manner, they wouldn't be losing as much money as the entity is. Also, develop a program that alerts the administration of people who've gone back to work but failed to report by tracking when they start paying into the system again after a long absence. Of course that may mean hiring people who are trainable, want to work and are sticklers for detail. Perhaps the whole Social Security Administration needs an overhaul of policies and procedures and employees.

  • Report this Comment On November 09, 2013, at 8:37 AM, Roger wrote:

    The only way the government will save SS is to make it mandatory that the Senate and Congress are on the same system when they retire instead of a 100% income and medical. They will then have the incentive to work for the people and not just themselves. Why should they be treated any differently?...Oh yeah, they make the rules (That they don't have to follow)

  • Report this Comment On November 09, 2013, at 9:31 AM, CaptAmericaa1 wrote:

    Several steps need to be taken, including raising the max income taxed.

    The children of illegals getbillions in soc sec benefits. Deport the illegals.

    Single moms shouldn't get soc sec unless they identify the father, then go after the father instead of paying soc sec.

    People should be required to invest in private retirement accounts.

    Increase the retirement age for those under 45 or so.

  • Report this Comment On November 09, 2013, at 10:42 AM, alram226 wrote:

    While I agree that the biggest problem with Social Security is that it was put into the General Fund, let's get the facts straight. It was Lyndon Johnson and the Democrat-controlled congress who put that into place, ostensibly to fund Johnson's "Great Society" . (And how did that work out ? Like every other Democrat idea, not very well.) Had the Democrats not stolen the trust fund, and spend it on foolish (sorry, Motley Fool) projects and programs that had no accountability and ever-increasing budgets, Social Security would not be in the mess its in.

    Put the blame where it belongs. Or, just vote Democrat. It's easier than thinking for yourself.

  • Report this Comment On November 09, 2013, at 12:29 PM, Burstedbladder wrote:

    Keep all the gd thieving politicians hands out of the SS till is the only thing that will save it, and then make the Bush family pay back all they stole from it and then left a bunch of useless IOU's for the people.

  • Report this Comment On November 09, 2013, at 1:10 PM, peckbill wrote:

    “Well, the truth is...ah, shoot, well; we all know there's Washington's math problem. Alan Sloan in recent Newsweek says he spends 150%. What we've been doing, Mr. Chairman, in all reality, is taken a hundred billion out of the Social Security Trust Fund, transferring it over to the spending column, and spending it. Our friends to the left here are getting their tax cuts, we getting our spending increases, and hollering surplus, surplus, and balanced budget, and balanced budget plans when we continue to spend a hundred billion more than we take in.

    That's the reality, and I think that you and I, working the same side of the street now, can have a little bit of success by bringing to everybody's attention this is all intended surplus. In other words, when we passed the Greenspan Commission Report, the Greenspan Commission Report only had Social Security in 1983 a two hundred million surplus. It's projected to have this year a 117 million surplus. I've got the schedule; I'll ask to put in the record the CBO report: 117, 126, 130, 100, going right through to 2008 over the ten year period of 186 billion surplus. That was intended; this is dramatic about all these retirees, the baby boomers. But we foresaw that baby boomer problem; we planned against that baby boomer problem. Our problem is we've been spending that particular reserve, that set-aside that you testify to that is so necessary. That's what I'm trying to get this government back to reality, if we can do that.

    We owe Social Security 736 billion right this minute. If we saved 117 billion, we could pay that debt down, and have the wonderful effect on the capital markets and savings rate. Isn't that correct? Thank you very much, Sir. Thank you, Mr. Chairman.”

    The above explains how the lack of control takes advantage of the federal money. As of 2013 the federal government owes 2.6 trillion dollars to the Old Age and Survivors Insurance trust fund (Social Security) plus an additional 140 billion dollars for the disability trust fund. Here is the kicker; Congress keeps bringing up the possibility of an increase in Social Security because the fund is running out of money. The joke is on the elderly and the ignorant that put idiots in Congress as representatives.

  • Report this Comment On November 09, 2013, at 4:21 PM, mortmain wrote:

    The government created S corporations... So the government created the problem. The basic problem is the government keeps expanding the benefits without a comparable increase in taxes. But that's how politicians buy votes.

  • Report this Comment On November 09, 2013, at 5:47 PM, Plan2Prosper wrote:

    Hmm, any chance that only polling those over 50 might skew the results? As a hard-working, high-earning young person skeptical this program will exist when I retire, I'd favor raising the age and eliminating COLA (which seems a good way to gradually minimize the program importance). I definitely oppose more taxes. I could see whymeans testing might have appeal, but that also seems unfair given how much more high earners already pay into the system.

  • Report this Comment On November 09, 2013, at 7:18 PM, Harleylady02 wrote:

    I think EVERYBODY should have to pay ALL taxes no matter if they make $10,000 a year or $10 MILLION !

  • Report this Comment On November 09, 2013, at 9:43 PM, qwert456 wrote:

    Sure is interesting that the majority of people support something that does not affect themselves. It would really be better to ask questions that would actually impact those wishing to make a change such as lowering the payments or delaying full retirement. If we're voting on stupid things, I vote that more children work in China sweatshops to pay for our retirements here in the US.

  • Report this Comment On November 09, 2013, at 9:44 PM, MUDFLAP514 wrote:

    The Golden Rule "Who ever holds the Gold makes the rule" Our Congressman make well over $113,700....They are going to increase their deductions....???? Are you kidding me!!!!

  • Report this Comment On November 10, 2013, at 2:23 AM, allykat7825 wrote:

    Quert, above is correct in noting that everyone seems to support what is to their own best advantage. One way or another, that will always be the case. In is illogical to think that one would vote against his or her best interest. Also, I noted that people cannot give up their political prejudices as some claim it was Reagan who 'borrowed' 2.5T and others blame the Dems. It is conservative financial article of faith that deficit financing is a viable strategy.

  • Report this Comment On November 10, 2013, at 6:08 AM, carmeno wrote:

    I agree with many. "Pay back" all the money owed by the feds with the fake paper, if they can manage to print it without mistakes, and the program will have that many more "funds" in the books. Second, put a HEX on any member of Congress, the White House or any other entity (such as Obamacare) trying to use the money for things other than SS benefits. Totally eliminate ANY earnings maximum and include all perks such as stock options, private jets, etc as earnings. That should increase the fund by a few billion, taking into account CEO pay in some companies. No COLA but paying interest to the people who contributed directly of 4% for the use of their hard earned money, with includes benefits (as in the employer's portion). Exclude anyone who hasn't earned a penny, including spouses. Go back to making it almost impossible to get disability benefits, like before it became the new unemployment benefit to pretend the economy is better off than it is. Also, since the courts have decided that corporations are people, they should pay payroll taxes on earnings. Why go on. As if what I say would ever be implemented. I'm just stating my "sarcastic" opinion, I'm not delusional to believe that anything will be done except continue with the boogie man "we are almost out of funds" nonsense. Just one more thing to say: Plan2Prosper, you do know you would be one of the ones most affected by your suggestions? You will never be a high earner and high earners get higher benefits although the percentage stays the same so they are not really paying higher. (Are you still in grade school?)

  • Report this Comment On November 10, 2013, at 9:26 AM, Autoknowtive wrote:

    The Social Security's Old-Age, Survivors, and Disability Insurance (OASDI) program which limits the amount of earnings subject to taxation for a given year, increases from the 2013 $113,700 to $117,000 for 2014. No wonder why that was the only 'choice' that got a majority of support (to raise the maximum earnings on which workers have to pay Social Security payroll taxes), as the 'decision' had already been made with a pre-determined calculation. Thre has been an increase every year since 1972, with the exception of 2009-2011 (crash was 2008CY). So this won't provide any true 'relief' or fix for what is failing. I would have to agree with Harleylady02 that everyone should have to pay taxes regardless of how much they make (i.e., no ceiling).

  • Report this Comment On November 10, 2013, at 11:24 AM, jessejr wrote:

    The only path left amidst the confusion and selfish interests prevailing is for USA to bottom out like Greece and start all over again along the path that our founders established this nation. Remember that Nazism, fascism, communism are all form of socialism that always fail since it removes the desire of people to work harder, compete, innovate and build wealth. Before the war on poverty started, exploited labor was contented with basic needs of American lifestyle, then the liberals came and agitated the populace to seek more for less work, forced redistribution of wealth under big brother govt. mastered the art of political patronage, political deception & manipulation and win elections thru class warfare with the aid of liberal media. It's too late to change course now, we need to go through another depression era hardships so people can work again in order to survive.

  • Report this Comment On November 10, 2013, at 6:22 PM, spankleelee wrote:

    Come on America! Do not feed into this scam. The countries financial figures are available online. And if you take the time to find facts, you look better. The REAL problem with it is the big guys, (corporations), haven't paid their share in a few years now. That means almost half of social security's revenue is not coming in. It's their fault and it's Obam's fault, and it's all of their fault. The media doesn't tell us because they are a corporation that isn't paying! Hello?? Wake up!

  • Report this Comment On November 10, 2013, at 6:24 PM, jdmeth123 wrote:

    I wish Wall Street had "stolen" my SS contributions. I would have only have six-hundred fifty thousand dollars in my account now. That's despite never earning more than $45000 a year.

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Dan Caplinger
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Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on Fool.com. With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

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