Retirement planning confidence in the future of Social Security is weak, with three out of 10 people believing they'll never be able to collect, according to a survey by Findlaw.com, a website that provides legal information for professionals.
Another 31 percent are fairly confident that they will receive something from the program, while the rest are unsure. Even people 55 and older are not positive that they'll be able to count on Social Security in retirement, with 36 percent saying they lack confidence that the checks will arrive.
Warnings by the Social Security Administration and the Treasury Department that checks could be delayed if the debt ceiling isn't lifted don't inspire confidence. Before you panic, look at it this way:
Social Security is the most important program the country has. Nine out of 10 people 65 and older get a check. For those people, Social Security represents an average of 39 percent of their income. For 23 percent of married couples and 46 percent of unmarried people, Social Security represents 90 percent or more of their income.
Older Americans are reliable voters. I pity the politician who votes to do anything detrimental to Social Security. Even cutting benefits for some people or in small ways is politically unpalatable.
But we do need to make some changes. In total, 161 million workers are covered by Social Security. There are currently 2.8 workers for every recipient of Social Security. By 2033, that will drop to 2.1 workers for each recipient. You don't have to be a math genius to see that something has to give.
One solution that is often suggested is to raise or eliminate the $113,700 wage cap on which Social Security taxes are levied. We also could increase the wage tax on both workers and employers. Another suggestion is to make 100 percent of Social Security payments taxable; currently, a maximum of 85 percent of Social Security income can be taxed. We could adopt the chained consumer price index, or CPI, on which cost-of-living adjustments are based. That would slow the growth of the program and spread the pain around.
Nobody likes any of these ideas very much. All of them raise costs for somebody. But keeping the program solvent and the checks flowing is vital. We need our government leaders to understand that and have the fortitude to do something about it.