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Reform Options for Social Security

The most prominent options for improving Social Security's financial picture are described in this AARP Public Policy Institute Insight on the Issues, with a focus on improving the funding status of Social Security over the next 75 years. The 14 reform proposals fall into three broad categories: raising revenues, reducing benefits, and investing part of the trust fund assets in equities or corporate bonds. The paper provides estimates of the impact of each reform option on the Social Security system's overall financial status. In addition, the pros and cons of each reform are explored. The reform alternatives could be combined in many different ways to achieve long-term solvency for the program. Although no particular reform package is suggested, it is concluded that there are many possible Social Security reform options besides privatization and that any solvency package will need to bring together various options that stand up to evaluation in light of their impact on current and future beneficiaries, adequacy and equity of benefits, and the solvency of the program as a whole.

For more information, please contact Alison Shelton at 202/434-3910. (9 pages)