There Are Only Two Ways to Fix Social Security: Cut Benefits or Raise Revenues

Mar 3, 2023 / By Elaine Floyd, CFP ®

As Social Security begins to move to the front burner in Washington, it will be important to keep a clear head when reading about possible revisions. No politician wants to be responsible for either cutting benefits or raising taxes, so we are starting to hear about “alternative” solutions, such as raising the full retirement age or revising the benefit formula through “progressive price indexing.” These are presented as a “third way” that cause little or no pain for anyone.

In her latest piece for Marketwatch, Alicia Munnell reminds us that there are only two ways to fix Social Security: cut benefits or raise revenues. The raising of the full retirement age amounts to a benefit cut for future retirees. Progressive price indexing would change the benefit formula for high earners so that future indexing factors and bend points would depend on the rise in prices instead of wages, as it’s done now. This, too, amounts to a benefit cut.

Munnell calls this a “dirty fight” because it’s not honest. She is hoping for a clean fight in Washington that clearly spells out what the proposals actually are. She also believes cutting benefits would be disastrous for our country. That leaves the only other option: raising revenues.

Read her Marketwatch article here.

As director of retirement and life planning for Horsesmouth, Elaine Floyd helps advisors better serve their clients by understanding the practical and technical aspects of retirement income planning. A former wirehouse broker, she earned her CFP designation in 1986.



It would be nice to read the MarketWatch article without having to subscribe for the service; I already subscribe to Horsesmouth.

We can't do anything about Marketwatch's subscriber fees, but the blog post conveyed the gist of the article. You don't really need to read the referenced article.

This material is provided exclusively for use by individuals with an active license to the Savvy Social Security Planning Program. Use of this material is subject to the Social Security Planning Program Agreement and applicable copyright laws. Unauthorized use, reproduction or distribution of this material is a violation of federal law and punishable by civil and criminal penalty. This material is furnished “as is” without warranty of any kind. Its accuracy and completeness is not guaranteed and all warranties express or implied are hereby excluded.

© 2024 Horsesmouth, LLC. All Rights Reserved.