Social Security benefits constitute about one-half of the monthly income for more than 60 percent of seniors, according to the Social Security Administration.
But there is widespread concern that Social Security faces long-term trouble, as Fox Business reports.
Because of the increased Social Security expenditures caused by the ongoing retirement of baby boomers and longer life expectancies, the concern is that Social Security will go bankrupt by about 2030.
Many have proposed solutions, including the Social Security Reform Act of 2016, introduced in December by Republican Rep. Sam Johnson of Texas, who is the chairman of the Ways and Means Subcommittee on Social Security.
Johnson’s plan proposes to raise the retirement age from 67 to 69, alter how the annual cost-of-living adjustment is calculated and eliminate the taxation of Social Security benefits by 2054, among other reforms.
But this plan could end up hurting most seniors, in the view of Fox Business analyst Sean Williams.
Williams argues that raising the retirement age punishes everyone, that the new cost-of-living calculation harms seniors because it doesn’t keep pace with inflation, and that eliminating taxation of benefits reduces revenue when more revenue is what’s needed.
In summary, Williams concludes: “If the plan is implemented, the real purchasing power of Social Security benefits could be greatly reduced in the years to come, which is terrible news for a majority of current and future retirees.”
Some economists, like Dean Baker and Mark Weisbrot of the Center for Economic and Policy Research, reject the notion that Social Security is in trouble.
In their book “Social Security: The Phony Crisis,” Baker and Weisbrot “argue that there is no economic, demographic, or actuarial basis for the widespread belief that the program needs to be fixed,” according to the publisher’s description of the book.
The publisher quotes The Economist, which says: "Dean Baker and Mark Weisbrot have no trouble at all demonstrating that even on highly conservative assumptions about economic growth, the much-forecast insolvency of the Social Security system by about 2030 is most unlikely to happen then, if indeed ever.”