Opinion: There’s an easy fix for Social Security

On June 2, the Social Security Administration released its annual report, an easy-reading 275 pages filled with analysis and statistics. The bottom line: at its present rate, Social Security will be able to continue paying its full benefits until 2034.

The SSA’s solution at this time — in order to continue payment benefits beyond that date — is to accept a 23 percent reduction in payment benefits to those currently receiving Social Security. So, for example, a recipient who now receives $2,000 a month from Social Security would instead begin receiving $1,540 a month. Unquestionably, this sizable reduction would have a significant impact on the lives of many who depend on these benefits to meet their basic needs. Particularly in a time of rising costs for basic items, reduced SSA payments will adversely impact many on limited budgets.

Is there a better solution? Yes, absolutely. Eliminate the cap on Maximum Taxable Earnings. Here’s how that works: In 2022, individuals earning $147,000 or less pay 6.2 percent in taxes to Social Security. Also this year, income earned above $147,000 is not subject to the 6.2 percent Social Security tax.

Simple question: Why would someone earning $147,000 and someone else, in the same year, earning $800,000 pay the exact same amount in taxes for Social Security? That is precisely what’s happening. How does that make any sense at all? Do these higher income earners need a tax break? Of course not.

If the federal government would simply eliminate the Maximum Taxable Earnings cap on Social Security, it would effectively ensure that millions of senior citizens can maintain their benefits. It would be a basic, straightforward instance of applying tax equity (and common sense).

This would be a good time, on the heels of the new SSA report, to talk with your members of Congress and request that they raise the earnings cap on Social Security. Doing so would help now, and help later. And what politician wouldn’t be proud to put their name on a proposal to save Social Security?

Ben Fuchs, of West Hartford, is a certified financial planner and founder of Fuchs Financial, with offices in West Hartford and Middletown.