After a long and rewarding career, I am retired. Perhaps you are too. If not, you probably know a family member or friend who is. Maybe you are approaching retirement yourself and are looking forward to that next chapter in life.
Social Security, which celebrates its 90th anniversary this year, is foundational to a secure retirement. Beginning with my first job at age 16, I contributed from each paycheck to provide a future retirement payment from Social Security. So did my employers.
Social Security stands as one of the cornerstone programs in the tapestry of retirement planning and financial security for millions of individuals. Since its inception in 1935, the Social Security system has played a pivotal role in providing a safety net for retirees, disabled individuals, and survivors of deceased workers.
This cornerstone is under threat. In 2033, it is projected that Social Security will have about 80% of the assets needed to make full payments. Unless Congress acts, that means a 20% reduction in the amount of payment made to retirees – the payment that they were promised and that they had earned with the contributions both they and their employers made throughout their working years.
Surveys conducted by AARP indicate that 80% of individuals rely on or plan to rely on Social Security at least somewhat in retirement. That includes 39% of individuals that rely on or plan to rely on Social Security as the sole or primary income source in retirement. For many, a 20% reduction in Social Security income would be challenging. For some, that reduction will be daunting. For still others, that reduction would result in poverty.
This outcome doesn’t have to be. Congress can act now to prevent that outcome. Possible solutions include:
- Eliminate or raise the wage cap on which FICA taxes are paid. This would increase revenues to the Social Security Trust Fund.
- Increase payroll taxes, again resulting in an increase in revenues to the Social Security Trust Fund.
- Raise the retirement age at which individuals receive the full retirement payment. Again, this would increase revenues to the Trust while also recognizing our increased longevity.
- Reduce retirement payment amount for high income workers through the introduction of means testing that recognizes other income and assets available to individuals.
- Use other funding. For example, Sens. Bill Cassidy (R) and Tim Kaine (D) are collaborating on a proposal that would introduce an additional investment fund that would operate in parallel to the current trust fund — not replace it. This fund would be invested in stocks, bonds and other investments that generate a higher rate of return.
Social Security is far more than a monthly check—it is a social contract that underpins financial security, dignity, and peace of mind for millions of retirees. Its importance cannot be overstated, especially as the retirement landscape grows more complex and uncertain.
By providing guaranteed, inflation-protected income, reducing poverty, and serving as a stabilizing force in the economy, Social Security remains a linchpin in the pursuit of a secure and dignified retirement.
Thomas Sennett lives in West Hartford.
(Except for the headline, this story has not been edited by PostX News and is published from a syndicated feed.)
