There have been several stories in the past few years predicting the crash of the SS Disability and SS retirement systems. It is true that there are more workers are living longer and drawing more out of retirement than what was originally planned for. It is also true that there is a greater number of people drawing disability benefits. Both groups are taxing the SS system.
The two programs, retirement and disability, are separate and are funded separately, but there was a recent push to borrow from the retirement account to subsidize the diminishing disability program. This did not pass due to the great drain the aging baby boomers are putting on the retirement system currently.
Some of the problem is due to the growth in population. Some due to the fact that when SS was established, it was not intended to be a long term retirement program, nor was the number of disabled workers that would continue to multiple something that could have been handled at the time.
What can be done? The programs cannot be eliminated because so many Americans rely solely on SS Retirement or SS Disability for their survival.
Therefore, there are three options currently being considered by Congress:
- The first and least popular option would be to reduce the amount of benefits that both groups receive. While this will definitely help the problem, millions of Americans who are already struggling on the fixed income will suffer even further and large and powerful groups such as AARP will vehemently oppose this option. The average disability benefit is currently $1,146 per month, which most people already feel is too low.
- Raise the retirement age to 70. We are living longer and working longer and while this too will save millions per year, this option is having a lot of problems gaining support.
- The most popular plan before Congress right now is to raise the amount taxed to current workers in order to inject additional funds into the system. The majority of both Democrats and Republicans are in favor of either raising the maximum salary amount that SS tax counts; (the cap in 2014 was $117,700 which means only that amount of your salary is taxed. If you make more than this amount, there is no additional SS tax taken out. Only 6% of workers earn over the cap); or raising the amount of tax taken from all worker’s salaries, regardless of earnings.
Please visit our website: www.socialsecurityjustice.com or contact one of our Bailey & Galyen offices for additional information.