Social security, a lifesaver for millions of people, needs its own lifejacket

The National Social Security Month has just ended and ends with a sober reminder.

Program administrators released their latest projections last week, reiterating that the main trust fund is about to dry up in just 15 years. When exhausted, the current social security "plan" is to reduce benefits by 23% for every woman, man or couple in retirement. It is a calculation that we should all agree on and should be avoided.

The social security pension scheme (technically old-age and survivors' insurance, AVS) is essential for the more than 50 million beneficiaries who depend on it and for the millions of others who will join the ranks of future generations. .

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It has always been a powerful force against the poverty of the elderly and the foundation of the financial security of all retirees. But unless something is done, social security will become a major source of stress and insecurity, as people worry about the extent to which they can count on promised benefits.

Although social security plays a crucial role, controls are not bulky. For new retirees who claim benefits at age 66, the current age of retirement, monthly benefits range from about $ 840 for low-wage workers to $ 2,950 for those who regularly earn taxable income maximum. In fact, many workers make an advance demand, which reduces up to 25% the amount they get.

For the most desperate beneficiaries, an automatic reduction of 23% would be ruinous. Still, it is what the Directors' Project in 2034 will materialize when the program will have no further reservations and will be forced to limit its benefits to annual income.

The SIA Trust Fund will run out during these years as the program now pays more benefits than the social charges levied. This means that social security has certainly helped to improve the situation of the federal budget, but it is now increasing annual deficits, which are reaching unsustainable levels.

In short, Social Security has a financial problem that could threaten the income security of current and future retirees – a compelling reason to change the program. And a reform would also be an opportunity to modernize benefits more effectively to match the longevity of the 21st century, modern demographics, changes in marriage and divorce patterns, and the adequacy of retirement income, among other goals. commendable.

It is not difficult to develop a package to achieve these goals. Over the years, numerous studies, working groups, commissions and others have recommended combinations of reforms to help older beneficiaries, raise the poorest elderly and put social security on a sustainable path.

Many financial experts talk a lot about the importance of social security, proclaim how much reform is needed, and publish white papers on how the solution works. But in a program that has always been considered the third pillar of the policy, policymakers have taken no action. It must change.

Current and future recipients of social security deserve better than a symbolic month. They deserve a predictable program that can be counted on, based on a sound financial base. Seniors deserve to stop worrying about the size of their future checks and plan a rewarding retirement.

Although we probably disagree on the changes to be made, we agree that it is imperative to go forward. Politicians, stakeholders and badysts on both sides of the aisle agree that reforms are easier and more effective than steps are taken quickly. As Congress continues to drag its feet, the window for orderly reform is closing. The time has come to act.

– Douglas Holtz-Eakin, president of the American Action Forum, and Alicia H. Munnell, director of the Center for Retirement Research at Boston College. Both organizations are members of the Our Future for Retirement Security Campaign.

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