Options to fix Social Security’s projected shortfall, as listed by Senate committee

Options to fix Social Security’s looming shortfall

Social Security faces a projected $5.3 trillion shortfall over the next 75 years. Options for improving the program’s finances, with the percentage of the gap that would be eliminated:

—Immediately increase payroll taxes for workers and employers by 1.1 percentage points each, to 7.3 percent: 104 percent.

—Increase payroll taxes for workers and employers by 1 percentage point starting in 2022, and an additional percentage point starting in 2052: 103 percent.

—Increase payroll taxes for workers and employers by 1/20th of 1 percentage point each year for 20 years: 69 percent.

—Tax all wages including those above the current cap of $106,800, without providing additional benefits to high earners: 116 percent.

—Tax all wages including those above the current cap of $106,800, while providing increased benefits to high earners: 95 percent.

—Impose a new 5 percent tax on couples making more than $250,000 and individuals making more than $125,000: 62 percent.

—Reduce the annual cost-of-living increase in Social Security payments by 1 percentage point each year: 78 percent.

—Gradually increase the age when retirees qualify for full benefits from 67 to 68: 23 percent.

—Gradually increase the age when retirees qualify for full benefits from 67 to 70: 31 percent.

—Reduce Social Security payments by 5 percent for new beneficiaries in 2010 and later: 30 percent.

Source: Senate Special Committee on Aging

Note: Social Security is financed by a 6.2 percent payroll tax on wages below $106,800 a year. Workers and employers each pay a 6.2 percent tax on employees’ wages.