New app lets you decide

  • Social Security may not be able to provide full benefits by 2030 unless changes are made sooner.
  • As lawmakers ponder possible fixes, a new web tool from the American Academy of Actuaries lets you decide exactly what changes to make.

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You may have heard that Social Security funds are running out.

If that doesn’t change, it could impact the program’s ability to pay full benefits over the next decade.

Now a new virtual tool from the American Academy of Actuaries you can examine Social Security’s problems and decide exactly what changes you would make to restore their solvency.

The journey begins in Townsville, a virtual city that, according to the web app created by the non-partisan professional organization, aims to show Americans’ perspective in everyday life.

In The Social Security Challenge, users can decide exactly how to fill the program’s funding gap.

Source: American Academy of Actuaries

To start, users learn about the dilemma that Social Security is currently facing. Based on the 2022 annual report of the Board of Trustees of the Social Security Administration, the funds could be exhausted in 2035. At this point, 80% of the benefits would still be payable.

“A common misconception is that depletion of the trust fund would mean that Social Security benefits could not be paid at all,” said Linda K. Stone, senior pension fellow at the American Academy of Actuaries.

The urgency of Social Security issues has recently drawn the attention of legislators.

During February’s State of the Union address, President Joe Biden called on leaders on both sides of the aisle to stand up to show their support for Social Security and Medicare protections.

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But the solution to the program’s problems will not necessarily be straightforward.

In general, it will require either an increase in taxes, a cut in benefits, or a combination of both.

Several proposals were tabled in Congress. The difficulty, however, is getting both sides of the aisle to come to an agreement. For social security reforms to be passed, they need bipartisan support.

“When it comes to Social Security, it’s really important from a policy perspective that everyone involved is willing to hold hands and jump together,” said Shai Akabas, director of economic policy at the Bipartisan Policy Center.

Using the American Academy of Actuaries’ web app, titled The Social Security Challenge, players can visit various locations in Townsville to hear local opinions and concerns about the future of the program.

At places like the park, the gym and the post office, residents discuss their concerns or opinions about possible changes such as raising the level of payroll taxes on earnings for the wealthy or raising benefits for the low-income.

Players can also access a journal of notes that contains important information about the topics heard.

Users will learn about the many ways to solve insolvency problems…

Linda K Stein

Senior Pension Fellow at the American Academy of Actuaries

A picture of Townsville where players can visit various locations to hear locals’ opinions and concerns about the future of Social Security.

Source: American Academy of Actuaries

This may include changes that help bring more revenue into the program, such as: B. Applying payroll taxes to income over $250,000. In 2023, these levies are capped at $160,200 in revenue.

Or it may include power increases, such as For example, changing the annual cost-of-living adjustments to make them more generous, or making it so that unemployed years devoted to childcare are included in the calculation of Social Security benefits.

“The important point is that users learn about the wide variety of options that are available to address the bankruptcy issues and the differential implications of adopting some of those options,” Stone said.

As the debate among policymakers about the future of Social Security heats up, the tool could help improve the public’s understanding of the discussions, Stone said.

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The tool can also help them realize that implementing just one change – such as B. the increase in payroll taxes – may not be a miracle solution for restoring the solvency of the program.

“People pick options that they think, ‘Oh, that’ll solve the problem,’ and then they can see clearly, no, that’s not enough,” Stone said. “More needs to happen.”

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The American Academy of Actuaries encourages policymakers to share the web app with voters to educate them about Social Security and get their feedback on the changes they’d like to see.

To decide how to fix the program, check out the tool here.

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