6 Ways to Boost Social Security
1) Adjust the cap on Social Security payroll contributions. Currently, only wages up to $142,800 are subject to the Social Security payroll deduction. Also applying the payroll tax to wages over $400,000 would help address the majority of Social Security’s projected funding shortfall.
2) Increase the Social Security tax rate. A gradual increase in the Social Security payroll tax rate by a very small percentage to be phased in over a long period of time would significantly strengthen Social Security’s long-term financial outlook and provide revenue for some of the benefit improvements.
3) Provide a tax cut for middle-income beneficiaries, by raising the thresholds for taxation of Social Security benefits to $35,000 (single) and $50,000 (married).
4) Increase the basic benefit for all current and future retirees. A meaningful benefit improvement will provide a long overdue boost, especially for low-to-middle income beneficiaries who rely upon their Social Security benefit for the majority of their income.
5) Provide Social Security credits for caregivers. When computing the Social Security benefit, grant up to five family service years to workers who leave paid employment to provide care to pre-school children or to elderly or disabled family members. This enhancement will help provide greater parity for women’s benefits which are typically less than men’s due to interruptions to paid employment caused by family caregiving needs.
6) Improve the way Social Security’s annual cost of living adjustment is calculated by switching to a more accurate formula, the CPI-E, which is based on elderly spending habits instead of the current CPI-W formula based on spending habits of urban wage earners and clerical workers. This will help seniors, especially elderly women, keep pace with the rising cost of their healthcare and help them to be able to make ends meet.