"Social Security is a critical income source for many seniors, with the Social Security Administration reporting that these benefits account for around 31% of all income received by people over the age of 55. For around 39% of men and 44% of women 65 and over, benefits actually account for even more - about half their income. Since so many seniors are reliant on retirement benefits to help them make ends meet, it's a huge problem that the Social Security trust fund is at risk of running dry. Unfortunately, it's a problem that Americans need to reckon with, as Social Security benefits are on track for an automatic benefits cut as early as 2032."
"Sethi had a simple answer: "Eliminate the cap as a first step," he said. He also acknowledged that, "beyond that, other options are trickier & more complex." By eliminating the cap, Sethi is referring to the cap on the wages that are subject to Social Security tax. Right now, while most people pay taxes on all of their income, there is a wage base limit or a cap on the amount of benefits subject to tax."
Social Security provides a substantial share of income for older Americans, accounting for roughly 31% of income for people over 55 and about half of income for many 65-and-over men and women. The program's trust fund faces depletion risks that could trigger automatic benefit cuts as early as 2032. A primary revenue limitation is the payroll tax wage cap, which exempts income above the annual limit from Social Security taxation. Eliminating that wage cap would subject high earners' full wages to payroll taxes, increasing revenues and helping shore up benefits. Additional reforms are more complex.
Read at 24/7 Wall St.
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