As the general population ages, Social Security, retirement and other issues become top of mind. To give residents some peace of mind, the township library recently held a talk called, “Social Security: You Earned It!”
The presentation was created in collaboration with AARP and was presented by Sarah Spellman, a speaker for the organization. She began the talk by discussing issues that have arisen around Social Security in recent years, most notably financial challenges related to the declining ratio of workers to beneficiaries. She then went on to list possible solutions and the pros and cons of each.
One proposal is to raise or eliminate the wage cap, as only earnings up to $176,100 are currently subject to annual Social Security taxes. Raising or eliminating the maximum would allow for more income into the system through highter taxed earnings. Another solution would be to increase payroll tax for workers and employers.
“So rather than having payroll taxes at 6.2%,” said Spellman, “why not increase those by one to two percent possibly? And depending upon which of those you chose, you could impact the problem by either 25 up to 50%.”
Another solution would be implemented over several years by slowly increasing the full retirement age, currently 67 for those born in 1960 and after. Spellman argued against that on behalf of AARP, which advocates for keeping the minimum retirement age at 62 and full retirement age at 67.
“The argument for that is that there are some people who are in careers that you physically cannot continue to work that long into your life,” explained Spellman, using underwater welding as an example.
Another solution would be to reduce payments for high-income earners, which Spellman emphasized would include means testing. The final proposal she discussed was for the govnernment to find other financial sources, using money from the general fund and budgeting the Social Security shortfall, or diverting money from other programs.
“None of these are 100% impact,” Spellman acknowledged, “so it’s going to have to be a combination.”
Attendees at the library talk were each given a paper with all of the possible solutions laid out, so they could list pros and cons of their own. After that, Spellman led a group discussion on what attendees thought to be the best idea. Many suggested raising or eliminating the maximum amount of taxable income and capping payments for high-income earners.
Spellman then directed the group to AARP’s website; it has a tool that allows users to ask questions about Social Security. Some participants asked questions about when and if they should start taking Social Security, a query Spellman said she could not answer because it depends on an individual’s situation.
But Judy Greenberg attended the talk and found it beneficial.
“I think this seminar de-mystified some of the issues surrounding Social Security,” she observed. “We suddenly turn 65, and Social Security becomes front and center for us, and we’re not able to really understand what the whole system is about, how the demographics change in our world, how that system works and how we can best access the system.”
