Changing the benefit formula. Updating the COLA. Providing caregiver credits.
All of these notions are apparently on the table, at least for the moment, as the Senate Finance Subcommittee on Social Security, Pensions and Family Policy digs into how best to ensure the solvency of Social Security.
Social Security is financed through two trust funds, the Old Age and Survivors Insurance program and the Disability Insurance program. The latter is expected to be insolvent as soon as 2016. The quick fix would be to shift funds from one fund to the other. That, of course, is just a temporary fix.
Raising Social Security’s penalty for early retirement as well as the delayed retirement credit both deserve consideration, Fichtner said.
The current penalty for early retirement is a 25 percent reduction in annual benefits for those who retire at 62. On the other hand, the delayed retirement credit is an 8 percent increase in annual benefits for each year (up to age 70) claims are delayed beyond 66.
Also read: Towers Watson report challenges retirement ‘crisis’
According to the Urban Institute, nearly a fifth of all adult Social Security benefits go to the spouses and survivors of retired, disabled or deceased workers. Currently, spouses can receive up to a half of their husband or wife’s benefits when they are alive, and all of them when they die.
Expanding Social Security is also on some lawmakers’ minds.
The country’s aging population base invariably means that more family members — either spouses or adult children of the elderly — will become primary caregivers going forward.
In many cases, caregiving will become a full-time responsibility, pushing earners out of the workforce, potentially in their peak earning years. Family caregivers reduce taxpayer burden to Medicaid and Medicare. Yet, as it stands, access to benefits for caregivers is limited.