We're shelling out about $2,000 a year more in Social Security taxes in 2013 (based on $50,000-a-year earnings) now that the tax break expired. But guess what? Most workers say they don't mind paying into the Social Security system, and in fact, they're willing to dig deeper into their pockets to eliminate a projected financing gap and to improve benefits, a new survey finds.
More than three-quarters of 2,000 people polled, age 21 and up, say they value Social Security because it provides stability and security for millions of retirees, disabled individuals and widowed spouses and children. But 84 percent say they don't believe the program provides enough income for retirees. And 75 percent say we should consider raising benefits to provide a more secure retirement for people.
Some 60 million people receive Social Security benefits; the average monthly benefit amount is $1,261. Two-thirds of older adults say Social Security benefits make up more than half their income.
The survey by the nonpartisan National Academy of Social Insurance (NASI) was conducted to assess people's preferences about how to strengthen Social Security. It revealed a deep division between what Americans say they want and changes lawmakers are considering, such as cutting cost-of-living adjustments by using a new inflation measure that doesn't take into account the soaring cost of medical care, on which retirees spend a disproportionate amount of their income.
"At a time when Americans seem deeply divided about the right size and role of government, it is striking that Americans across political and generational lines agree on specific policies to pay for and improve Social Security benefits," says Jasmine V. Tucker, a NASI research associate.
Among the preferred options favored by more than two-thirds of those polled:
- Eliminate the cap on earnings taxed for Social Security ($113,700) gradually over 10 years
- Raise the Social Security tax rate from 6.2 percent to 7.2 percent, also gradually and over 20 years
- Increase Social Security's minimum benefit
- Hike Social Security's cost-of-living adjustment to reflect more accurately the level of inflation experienced by older adults
If Congress implemented those measures, Social Security's projected shortfall would be erased. Even better, those measures would provide a surplus, according to NASI.
Conversely, raising the retirement age to 70 was an unpopular policy change, the survey found.
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