--- title: 5 Ways to Fix Social Security's Funding Problems, According to Actuaries description: The Social Security trust funds are expected to run out in 2034 if Congress doesn't act. Could changing taxes and the retirement age help? authors: - name: Pete Grieve role: Lead News Reporter url: https://money.com/author/pete-grieve/ bio: Pete Grieve is a personal finance reporter. In his time at Money, Pete has covered everything from car buying to credit cards to the housing market. education: University of Chicago, BA Political Science at_money_since: 2022 articles: 602 covers: - Retirement - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Shopping - Taxes social: - https://twitter.com/pete_grieve - https://linkedin.com/in/pete-grieve-b5aa02138 - https://www.facebook.com/petegrieve4 editors: - name: Julia Glum role: Managing Editor url: https://money.com/author/julia-glum/ bio: Julia Glum joined Money in 2018 and specializes in covering financial trends that affect everyday Americans' wallets. She also writes Dollar Scholar, a weekly newsletter that teaches young adults how to navigate the messy world of money. education: University of Florida at_money_since: 2018 articles: 453 covers: - Retirement - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Shopping - Taxes - Technology also_seen_in: - Newsweek - International Business Times - CBS News - Good Morning America - WUSA9 - Pix 11 - The New York Times - Mashable - The Washington Post - CNBC - Politico social: - https://x.com/superjulia - https://www.linkedin.com/in/julia-glum published: '2023-11-01T14:36:38.000Z' modified: '2024-01-10T15:15:03.000Z' section: Retirement tags: - News word_count: 565 canonical: https://money.com/ways-to-fix-social-security/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Photo-illustration of a cut-up social security card taped back together.](https://img.money.com/2023/10/News-Social-Security-Fixes.jpg) The [Social Security](https://money.com/how-social-security-benefits-cola-calculated/) trust funds are expected to be depleted in about a decade if Congress doesn't act, leading an association of actuaries to argue that now is the time to think seriously about solutions. Taxpayer funds cover the bulk of Social Security payments, but if the program’s reserves run dry, beneficiaries would face immediate 20% cuts to their checks come 2034. Any decrease to Social Security payments would likely be extremely unpopular, considering they're a major source of retirement income for tens of millions of people. Politicians often make campaign promises that Social Security will remain in full force, but everybody seems to have a different idea about how to actually achieve that. According to a new [report](https://www.actuary.org/sites/default/files/2023-10/pension-brief-social-security-reform-sooner.pdf) from the ​​American Academy of Actuaries, the longer the issue is put off, the harder it will be to address the looming shortfall. Linda Stone, senior pension fellow for the academy, said in a Monday news release that there’s “a clear, compelling benefit and public good to Congress engaging the reform process sooner rather than later.” If legislators act quickly, they could consider “reform options that are more moderate, gradual, and give the American people time to adjust to any needed changes in benefits or [taxes](https://money.com/best-tax-relief-companies/),” Stone added. Here are five ways Social Security's financial challenges could be addressed so that it can pay out all scheduled benefits, according to the actuaries' report: ### 1\. Increase payroll taxes The payroll tax for Social Security, which is paid by workers and employers, could be hiked 25% in 2034 to make up the difference. That would be an increase from the current rate of 6.2% up to 7.75%. However, the report notes that this could be unaffordable for low-income Americans without additional changes to their federal income taxes. Gradual payroll tax increases, therefore, would be less disruptive. ### 2\. Tax high earners more Americans with high incomes [do not pay Social Security taxes](https://money.com/millionaires-social-security-taxes-income-cap/) after a certain point — for 2023, the threshold is $160,200. The actuaries note Congress could consider the option of taxing all earned income. Removing this cap, however, would only make up for 78% of the projected shortfall. ### 3\. Add new tax sources The report floats the possibility of taxing investment income to fund Social Security or increasing estate and gift taxes. But it points out that not only has this not been done before, it also is likely to face resistance. ### 4\. Reduce benefits for high earners Congress has long adhered to a tradition of not cutting benefits for people already getting paid, but the report details several options to potentially reduce benefits for high-earning Americans who are *not yet* eligible for Social Security. However, these measures would be insufficient to fix the 2034 shortfall. ### 5\. Raise the retirement age Americans become eligible to take Social Security at 62, though benefits increase the longer you wait until age 70. The report considers several ideas for increasing retirement ages to address the shortfall, including gradual approaches that (theoretically) wouldn't feel grossly unfair to people in different age cohorts. But raising the retirement age would be especially painful for low-income Americans and anyone who works a physically demanding job. ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/ways-to-fix-social-security/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Retirement", "item": "https://money.com/retirement/" }, { "@type": "ListItem", "position": 3, "name": "Social Security", "item": "https://money.com/social-security/" }, { "@type": "ListItem", "position": 4, "name": "5 Ways to Fix Social Security's Funding Problems, According to Actuaries" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/ways-to-fix-social-security/#webpage", "url": "https://money.com/ways-to-fix-social-security/", "name": "5 Ways to Fix Social Security's Funding Problems, According to Actuaries", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2023-11-01T14:36:38.000Z", "mainEntity": { "@id": "https://money.com/ways-to-fix-social-security/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/ways-to-fix-social-security/#breadcrumb" }, "dateModified": "2024-01-10T15:15:03.000Z" }, { "@type": "NewsArticle", "headline": "5 Ways to Fix Social Security's Funding Problems, According to Actuaries", "articleSection": "Retirement", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2023/10/News-Social-Security-Fixes.jpg", "width": 2880, "height": 1920, "caption": "News-Social-Security-Fixes" } ], "author": [ { "@type": "Person", "name": "Pete Grieve", "url": "https://money.com/author/pete-grieve/", "@id": "https://money.com/author/pete-grieve/#author", "description": "Pete Grieve is a personal finance reporter. 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