Congress Could Make Moves to Save Social Security

Ronald Reagan and Alan Greenspan increased the retirement age a generation ago in an attempt to save social security. Congress approved overwhelmingly the bill that these men worked to have passed. It raised the retirement age by two months a year for anyone turning 62 from the year 2000 through 2005, so now 66 is the age at which you can retire with full benefits. The 66 years marker will remain through 2016. The age will then “go up again at the rate of two months per year for those turning 62 from 2017 to 2022,” which means that for anyone born in 1960 or after, the full-benefit retirement age is 67. The law stops there though.

The LA Times suggests that Congress could take a hint from what Reagan facilitated before to save social security. In 1993, Clinton signed a budget bill that raised the portion of social security benefits subject to taxes to 85%. The change applied to beneficiaries who had more to be taxed and those with low incomes were not taxed on their benefits. The LA Times proposes that there may be a good reason to tax 100% of the benefits now that social security is in trouble again. The levy on the last 15% could apply to taxable incomes of $200,000 or more and recipients who have taxable income of $44,000 (joint filers) would not have to pay any tax on their benefits.

See Gerald E. Scorse, The Golden Trade-off, Los Angeles Times, Jan. 16, 2012. 

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.