2013 finds Social Security running out of money at an accelerated pace. At this point, people in their late 30’s should be wondering what we should do, since estimates foresee Social Security running out of money years before they’ll reach retirement age.
As previously reported by The Inquisitr, disability claims are skyrocketing, jumping up 29 percent to the point that 8.8 million Americans are receiving social security disability benefits.
In 2023, the CBO estimates spending will exceed $1.4 trillion compared to tax revenues of $1.3 trillion, a shortfall of about $100 billion. 2016 sees Social Security running out of money for the disability claims fund.
In 2010, we saw claims we would not see Social Security running out of money until 2049. In 2013, that estimate has changed to 2031. So, not only is Social Security running out of money, it’s running out of money at a greatly accelerating pace.
But it gets worse. If you combine the interest payments on the $16.8 trillion debt and spending on entitlement programs like Social Security, Medicare, and Medicaid then by 2025 these parts of the Federal budget are projected to devour all government income. All means all, with no money left over for the military or any other Federal government function. And those projections are months out of date, so this scenario might occur within 10 years.
Currently, the annual Social Security tax “cap” is $13,652.40, or 12.4 percent of a $110,100. Essentially, if you make more than $110k you’re contributing any more. Old estimates claimed that increasing the flat rate up to 12.5 percent would cause the entire Social Security program to become self-financing until 2085.
Businesses pay half of the the current 12.4 percent. So getting rid of the cap obviously shouldn’t expect businesses to match contributions since that would be horribly expensive. In response to Social Security running out of money, I would suggest a combination of the personal income cap removal while still keeping a business FICA-matching cap at $110,000. This would amount to a very large tax increase on the upper middle class and the rich, but the only other option is to greatly cut Social Security benefits.
What do you think of this plan for saving Social Security?