It seems that nobody really knows what to do about Social Security. Or maybe it’s that lots of folks do really know, but nobody has the guts to do it…
At any rate, presidential candidate Barack Obama and other Democratic presidential candidates have previously indicated that something needs to happen to save Social Security. Initially, most support seemed to be for a plan to lift the cap on the amount of income that is taxed to provide monthly Social Security checks in an effort to save the program. The program is expected to operate in the red in just ten years and it is anticipated that the funds would be completely exhausted by 2041.
However, this week on NBC’s “Meet the Press,” Obama said taxing more of a person’s income was the option he would push for if elected president.
Obama reportedly objects to benefit cuts or a higher retirement age. Instead, he said “I think the best way to approach this is to adjust the cap on the payroll tax so that people like myself are paying a little bit more and people who are in need are protected.” Currently, only the first $97,500 of a person’s annual income is taxed for purposes of Social Security. That cap is scheduled to rise to $102,000 next year.
Under current law, your Social Security retirement benefits will replace about 40% of your pre-retirement earnings. Because of the caps and other factors, the percentage is lower for people in the upper income brackets and higher for people with low incomes.
{ 3 comments }
