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Projected effects on beneficiaries
| Policy option | 2030 | 2050 | 2070 | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Median benefit change overall | Percent with lower benefits | Percent with higher benefits | Median benefit change overall | Percent with lower benefits | Percent with higher benefits | Median benefit change overall | Percent with lower benefits | Percent with higher benefits | |
| Cost of Living Adjustment | |||||||||
| Increase the cost of living adjustment | |||||||||
| Base it on the CPI-E | 2% | 0% | 82% | 2% | 0% | 83% | 2% | 0% | 84% |
| Reduce the cost of living adjustment | |||||||||
| Base it on the Chained CPI | -3% | 91% | 0% | -4% | 91% | 0% | -4% | 91% | 0% |
| Coverage |
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| Cover all newly hired state and local workers | 0% | 0% | 2% | 0% | 0% | 7% | 0% | 0% | 14% |
| Family Benefit | |||||||||
| Create an alternative survivor benefit | |||||||||
| Survivor receives the higher of the current law benefit or the alternative benefit equal to 75% of the survivor's own benefit plus the deceased worker's PIA | 0% | 0% | 8% | 0% | 0% | 9% | 0% | 0% | 10% |
| Reduce marriage duration requirement for divorced spouse benefits | |||||||||
| Allow divorced spouses who were married at least 5 years to receive benefits, but at a reduced rate | 0% | 0% | 1% | 0% | 0% | 1% | 0% | 0% | 1% |
| Reduce spousal benefits | |||||||||
| From 50% to 33% of the worker's PIA | 0% | 5% | 0% | 0% | 6% | 0% | 0% | 5% | 0% |
| Individual Account | |||||||||
| Allow voluntary individual accounts | |||||||||
| Allow workers to voluntarily contribute an additional 2% of pay (up to the tax max) to an individual account | 0% | 0% | 41% | 6% | 0% | 87% | 12% | 0% | 94% |
| Retirement Age | |||||||||
| Increase the EEA from 62 and the FRA from 67 | |||||||||
| At a rate of 1 month every 2 years starting in 2017 (EEA) and 2023 (FRA) | 0% | 9% | 15% | 0% | 49% | 21% | -3% | 60% | 21% |
| Increase the FRA from 67 | |||||||||
| At a rate of 1 month every 2 years starting in 2023 | 0% | 11% | 0% | -2% | 66% | 0% | -6% | 80% | 0% |
| To 68, at a rate of 1 month every 2 years | 0% | 11% | 0% | -2% | 66% | 0% | -5% | 77% | 0% |
| Taxation | |||||||||
| Increase Social Security payroll tax from 12.4% | |||||||||
| To 15.2% and then to 18.0% in 2056 | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% |
| Increase the earnings subject to taxation | |||||||||
| Make all earnings subject to the Social Security payroll tax, and include these earnings in benefit computations | 0% | 0% | 6% | 0% | 0% | 16% | 0% | 0% | 19% |
| Make 90% of earnings subject to the Social Security payroll tax, include these earnings in benefit computations, and phase in from 2015 to 2024 | 0% | 0% | 5% | 0% | 0% | 16% | 0% | 0% | 19% |
| Tax health insurance premiums | |||||||||
| Apply the Social Security payroll tax to employer-sponsored health insurance premiums | 0% | 3% | 12% | 1% | 2% | 52% | 3% | 2% | 72% |
| Worker Benefit | |||||||||
| Credit earnings to caregivers' records | |||||||||
| Up to 5 years at one-half average wage when caring for children under age six | 0% | 1% | 18% | 0% | 1% | 26% | 0% | 1% | 26% |
| Eliminate the retirement earnings test | |||||||||
| For retired worker beneficiaries aged 62 or older and for survivor beneficiaries aged 60 or older | 0% | 17% | 3% | 0% | 32% | 3% | 0% | 33% | 3% |
| Increase benefits for older beneficiaries | |||||||||
| PIA increase is phased-in starting at 81 and by 85 is equal to 5 percent of the average retired-worker PIA in the year the beneficiary turns 80 | 0% | 0% | 22% | 0% | 0% | 30% | 0% | 0% | 30% |
| Increase the computation period from 35 years | |||||||||
| To 40 years (does not apply to DI) | 0% | 45% | 0% | -3% | 76% | 0% | -3% | 80% | 0% |
| Index PIA factors to longevity | |||||||||
| Multiply factors by the ratio of life expectancy at 67 in 2018 to the life expectancy at age 67 in the 4th year prior to the year of initial benefit eligibility | 0% | 12% | 0% | -3% | 71% | 0% | -8% | 88% | 0% |
| Price index the PIA formula | |||||||||
| Protect the bottom 30% of workers from price indexing | 0% | 27% | 0% | -8% | 70% | 0% | -17% | 77% | 0% |
| Reconfigure the minimum benefit | |||||||||
| For workers with 10 to 30 years of coverage (YOC = 4 quarters earned that year) set PIA up to 125% of the monthly poverty guideline | 0% | 0% | 10% | 0% | 0% | 16% | 0% | 0% | 17% |
| Reduce the 90%, 32%, and 15% PIA factors | |||||||||
| To 90%, 21%, and 10% over a 31-year period | -1% | 53% | 0% | -10% | 90% | 0% | -17% | 95% | 0% |
| Source: SSA/Office of Retirement Policy, using MINT 7 Run: 03/12/2015
Providing these estimates does not imply SSA support for the proposal, nor is SSA responsible for any interpretations of these estimates.
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| Policy option | 2050 | 2070 | ||||
|---|---|---|---|---|---|---|
| Median benefit change overall | Percent with lower benefits | Percent with higher benefits | Median benefit change overall | Percent with lower benefits | Percent with higher benefits | |
| Cost of Living Adjustment | ||||||
| Increase the cost of living adjustment | ||||||
| Base it on the CPI-E | 34% | 0% | 100% | 36% | 0% | 100% |
| Reduce the cost of living adjustment | ||||||
| Base it on the Chained CPI | 25% | 0% | 100% | 27% | 0% | 100% |
| Coverage |
||||||
| Cover all newly hired state and local workers | 30% | 0% | 100% | 32% | 0% | 100% |
| Family Benefit | ||||||
| Create an alternative survivor benefit | ||||||
| Survivor receives the higher of the current law benefit or the alternative benefit equal to 75% of the survivor's own benefit plus the deceased worker's PIA | 30% | 0% | 100% | 32% | 0% | 100% |
| Reduce marriage duration requirement for divorced spouse benefits | ||||||
| Allow divorced spouses who were married at least 5 years to receive benefits, but at a reduced rate | 30% | 0% | 100% | 32% | 0% | 100% |
| Reduce spousal benefits | ||||||
| From 50% to 33% of the worker's PIA | 30% | 3% | 97% | 32% | 3% | 97% |
| Individual Account | ||||||
| Allow voluntary individual accounts | ||||||
| Allow workers to voluntarily contribute an additional 2% of pay (up to the tax max) to an individual account | 39% | 0% | 100% | 49% | 0% | 100% |
| Retirement Age | ||||||
| Increase the EEA from 62 and the FRA from 67 | ||||||
| At a rate of 1 month every 2 years starting in 2017 (EEA) and 2023 (FRA) | 29% | 2% | 98% | 27% | 4% | 96% |
| Increase the FRA from 67 | ||||||
| At a rate of 1 month every 2 years starting in 2023 | 27% | 1% | 99% | 23% | 2% | 98% |
| To 68, at a rate of 1 month every 2 years | 27% | 1% | 99% | 24% | 2% | 98% |
| Taxation | ||||||
| Increase Social Security payroll tax from 12.4% | ||||||
| To 15.2% and then to 18.0% in 2056 | 30% | 0% | 100% | 32% | 0% | 100% |
| Increase the earnings subject to taxation | ||||||
| Make all earnings subject to the Social Security payroll tax, and include these earnings in benefit computations | 30% | 0% | 100% | 32% | 0% | 100% |
| Make 90% of earnings subject to the Social Security payroll tax, include these earnings in benefit computations, and phase in from 2015 to 2024 | 30% | 0% | 100% | 32% | 0% | 100% |
| Tax health insurance premiums | ||||||
| Apply the Social Security payroll tax to employer-sponsored health insurance premiums | 32% | 1% | 99% | 36% | 0% | 99% |
| Worker Benefit | ||||||
| Credit earnings to caregivers' records | ||||||
| Up to 5 years at one-half average wage when caring for children under age six | 30% | 0% | 100% | 32% | 0% | 100% |
| Eliminate the retirement earnings test | ||||||
| For retired worker beneficiaries aged 62 or older and for survivor beneficiaries aged 60 or older | 30% | 0% | 100% | 32% | 0% | 100% |
| Increase benefits for older beneficiaries | ||||||
| PIA increase is phased-in starting at 81 and by 85 is equal to 5 percent of the average retired-worker PIA in the year the beneficiary turns 80 | 30% | 0% | 100% | 32% | 0% | 100% |
| Increase the computation period from 35 years | ||||||
| To 40 years (does not apply to DI) | 26% | 0% | 100% | 27% | 0% | 100% |
| Index PIA factors to longevity | ||||||
| Multiply factors by the ratio of life expectancy at 67 in 2018 to the life expectancy at age 67 in the 4th year prior to the year of initial benefit eligibility | 26% | 1% | 99% | 20% | 1% | 99% |
| Price index the PIA formula | ||||||
| Protect the bottom 30% of workers from price indexing | 19% | 9% | 88% | 8% | 34% | 63% |
| Reconfigure the minimum benefit | ||||||
| For workers with 10 to 30 years of coverage (YOC = 4 quarters earned that year) set PIA up to 125% of the monthly poverty guideline | 30% | 0% | 100% | 32% | 0% | 100% |
| Reduce the 90%, 32%, and 15% PIA factors | ||||||
| To 90%, 21%, and 10% over a 31-year period | 16% | 2% | 96% | 9% | 2% | 92% |
| Source: SSA/Office of Retirement Policy, using MINT 7 Run: 03/12/2015
Providing these estimates does not imply SSA support for the proposal, nor is SSA responsible for any interpretations of these estimates.
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