Since I work in this industry, it is likely that I track developments on this more than you. While I do not have any special insights or inside information, I have some thoughts. My first comment is that it is not going away. It will continue to be an important income source for low and middle income people. Believe it or not, I have many, many clients that are doing ok – maybe not great – but ok living on their Social Security plus some small other income they generate from work or savings. They have simply adjusted their lifestyle to meet their income – this is key.
Second, there will need to be changes since the system is projected to pay only about 77% of benefits in 20 years or so. I foresee reductions in benefit payments for what would be higher income recipients. It is a form of means testing and I do not see any way around this. I don’t know how or where the lines will be drawn, but do believe this will happen. Finally, and I realize that this is unpopular with many people, I would like to see an increase in the Full Retirement Age continue to age 70. That is very difficult for many people to accept, but I believe it is an important part of the solution. Regardless, Social Security is not going anywhere, it will simply be less important to future generations.
Medicare is, in my view, a much more challenging issue…
What do you think?