This Radical Proposal Could Change the Way Social Security Benefits Are Paid
Millions of seniors today count on Social Security as a major income source, but recipients risk a widespread reduction in benefits if the program's impending financial shortfall isn't addressed. In the coming years, Social Security expects to owe more in scheduled benefits than it collects in revenue. The reasons is that the program's primary revenue source is payroll taxes, but as a growing number of baby boomers exit the workforce and too few replacement workers enter it, Social Security will have a shortfall on its hands. And while the program does have trust funds it can tap to compensate for a lack of revenue, once that money runs dry, which could easily happen within the next 15 years, benefit cuts may be on the table.
Not shockingly, lawmakers are invested in avoiding a massive reduction in benefits, and to facilitate that, different proposals have been floated with the aim to raise added revenue for Social Security or help the program cut its expenses. One popular idea, for example, is raising full retirement age, or the age at which seniors are entitled to collect their full monthly benefit based on their earnings history. While that solution could work in theory, those opposed to it say it's unfair to lower-income seniors who are, statistically speaking, less likely to live longer lives.
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Source Fool.com
