Alert
Close

Think you know AARP? What you don't know about us may surprise you. Discover all the 'Real Possibilities'

Highlights

Open

You and Your Town Contest-You could win an AARP RealPad
Introducing RealPad by AARP
AARP Auto Buying Program

AARP-iPad-ePub-app

Most Popular
ARTICLES

Viewed

Free Fun!

AARP Games - Play Now!

Work
PROGRAMS

Best Employers for Workers Over 50

See the latest winners of this AARP recognition program.

Employer Resource Center

Attract and retain top talent in a changing workforce.

Systems Soldier On

Social Security, Medicare Healthier Than Expected

Annual trustees report says health care law may help ease deficit worries

In 2018, when the new health care law calls for taxes on “Cadillac” insurance plans, employers are expected to reduce those high-cost health benefits in favor of paying higher wages. The anticipated payroll taxes on that extra income is expected to ease Social Security deficits.

Overall, the Social Security trust fund will continue to grow because of interest income, and payouts won’t begin whittling away at assets until 2025. Under current funding methods, 75 percent of benefits could be paid out through 2084.

Small changes would work


Herd, of the University of Wisconsin, says that a variety of proposed solutions could prevent benefit cuts, from hiking the retirement age to raising payroll taxes. According to the actuarial figures released today, for example, Social Security retirement, survivor and disability payments could be stabilized for 75 years by adding another 1.92 percent to the existing 12.4 percent payroll tax.

“You could easily pull it all together with a few very small changes,” said Herd. “They may be changes people don’t like, but they aren’t dramatic and they’d prevent a 25 percent cut in benefits after 2037.”

According to a Gallup poll released in July, 67 percent of Americans surveyed preferred that payroll taxes be applied to all income, instead of just the first $106,800 as it is now.

“The trustees confirm that Social Security can pay full benefits for decades, and approximately 75 percent into the future even if nothing is done,” said AARP Executive Vice President John Rother.

“However, that is not good enough. AARP renews its call to act in the coming few years to shore up the system’s long-term ability to pay promised benefits to retirees, survivors and those with disabilities.”

“Social Security plainly faces challenges in the future, but it remains a bedrock of economic security for tens of millions of Americans and we will ensure it remains that way for generations to come,” said Sander M. Levin, D-Mich., chairman of the House Ways and Means Committee.

Melissa Preddy is a Michigan-based freelance writer specializing in personal finance and consumer affairs. She formerly worked for the Detroit News.

Topic Alerts

You can get weekly email alerts on the topics below. Just click “Follow.”

Manage Alerts

Processing

Please wait...

progress bar, please wait

Tell Us WhatYou Think

Please leave your comment below.

Jobs You Might Like

Discounts & Benefits

From companies that meet the high standards of service and quality set by AARP.

UPS Store membership discount aarp benefits

Members save 15% on eligible products/services, 5% on UPS shipping at The UPS Store®.

membership adt

Small business owners save 20% on new installation of any new ADT security system.

Mujer en la parte de afuera de so negocio

Free quotes for members from the AARP® Small Business Insurance Program.

Member Benefits

Renew today! Members receive exclusive member benefits & affect social change.

Rewards for Good

Your Points Balance:

Learn More

Earn points for completing free online activities designed to enrich your life.

Find more ways to earn points

Redeem your points to save on merchandise, travel, and more.

Find more ways to redeem points

Explore Your Learning Possiblities