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A fair and balanced strategy to preserve Social Security for the long haul will include some moderate changes to revenues and benefits. But the changes need not cause hardship for those who need benefits most or harm the middle class. The sooner changes are made, the more gradual they can be, and the more time people will have to adjust their financial plans.

The essential guarantee of Social Security can never be supplanted by investments in volatile financial markets. Private savings have an important role, but only as a supplement, and they should not be funded by money needed for Social Security’s long-term commitments.

Savings and Pensions

Building a more secure future will require new strategies to promote saving. Tax incentives and financial education can bolster this effort. Young people should be taught to embrace the “savings habit” early in life, and that early withdrawals do lasting harm to their nest eggs.

Employers should be encouraged to retain traditional, defined-benefit pensions, which provide better protections than 401(k) plans and Individual Retirement Accounts. Defined benefits protect individuals from the uncertainties of financial markets. Employers should keep their promises and recognize that workers rely on benefits that have long been in place. While beleaguered state governments may need to adopt reforms for the future, retirees and workers near retirement should be protected from benefit cutbacks.