Tighten your seat belts as the assault on middle class America takes off even before the new administration takes office. As reported in The Fiscal Times, Rep. Sam Johnson (R-TX), chair of the House Ways and Means subcommittee on Social Security, “has begun circulating a proposal that would make major cuts and changes to the Social Security system in the coming decades.”
- raising the full retirement age from 67 to 69 would strongly affect the low-wage workers who rely most heavily on Social Security. We can either open poor houses or increase taxes to pay for a larger number of elderly living in poverty. Details at: http://www.thefiscaltimes.com/2016/12/11/Here-s-First-Draft-GOP-s-Plan-Overhaul-Social-Security
For a much more prudent, humane and balanced approach to fixing the Social Security funding challenge, read what the Center for Retirement Research at Boston College proposes: small changes to many aspects of the program: http://crr.bc.edu/special-projects/books/the-social-security-fix-it-book/
Let’s begin by raising the the earnings cap (or “wage base”) currently $118,500. Income above that amount is NOT subject to the Social Security FICA tax. “When the current cap was put in place, Social Security covered 90 percent of all U.S. earnings. But rising inequality pushed an increasing share of earnings above the ceiling, so Social Security now covers only 83 percent. One proposal would gradually reset the cap, over a 10-year period, to cover 90 percent of earnings” (The Social Security Fix-It Book). Learn more about how minor changes in this very popular and cost-effective program could solve the funding gap for the next 75 years.
Source: Financial Planning for Women