We eventually reach the point with a retirement age of 75 and a life expectancy of 52.

Problem solved! Social Security is flush again!

Hey, since nobody lives long enough to collect benefits anymore, what say we take all that money and, you know, just sort of slip it to the DoD?

but as you suggest, some of us here see AARP for what it is..and isn't. AARP is first and foremost, an insurance company..'many DUers dislike insurance companies' may be a more accurate statement. AARP tells seniors what they want to hear often..they are always looking out for the interest of the senior insurance market. AARP is what it is, they do have many seniors hoodwinked into believing they are senior advocates, which they are, as long as the advocacy doesn't adversely effect the insurance business..

Many worked most of their lives with much lower withholding rates. They got to retire at 65. The write up does not take into account the tiered benefit formula that offers little additional benefits for those making over $50K (they effectively subsidize the system). My proposal is as follows:

1. Lift the cap on benefits but tax those benefits above the current cap at a lower percentage rate. This reflects that these additional dollars will not go into calculating the benefits formula, but recognizes the obligation of that additional income to support the overall system. I think a 2% lower rate would be fair but you can do tax models to determine the best rate.

2. An iron clad absolute guarantee that withholding rates will not be increased above some level no matter what that does to benefits (say between 6.2% - 7.2%).

3. A firm pay as you go system (no more massive Trust Funds which are like a piggy bank everyone whines about when you try to get the dollars out - 1983 was a horrible idea). Some level of budget commitment to eventually retire the S.S. Treasuries within the next ten years. Note right now the removal of the cap should lead to lower withholding rates. On the other hand I would remove those dollars from the S.S. Trust Fund that were collected because of the payroll tax holiday which was ridiculous.

4. Sliding scale of reduction on benefits (not means testing which is currently done in part through the tax code). You do not want to throw up disincentives to saving for retirement. The first $10K should always be guaranteed. Perhaps the next $10K can only be reduced by 20%. The third $10K by 40% (we can play with the numbers). This is where the current retirees need to have skin in the game. Note I think most of the funding hole should be closed by 1. and 2.

5. I say no on increasing the retirement age. 67 is plenty old enough. I would draw a line in the sand on this one.

6. I can be convinced to make all income subject to S.S. - lets talk about it. I don't understand why it would be limited to wage income (and it sure as hell should not be taxed at 15% Federal top marginal).

7. Do something about some of the weirdness in the code when it comes to multiple marriages and May-December marriages. I also think the disability portion is being abused based upon the growth rates I have seen in disability. Of course S.S. should be extended to same sex couples if they choose to marry (and they should be able to marry).

1) Is already done, the first 9k is vested at 90%, the next tier is 35% and the final tier up to the cap is 10%. Raising the cap high enough to capture 90% of incomes would instantly solve every budgetary issue facing OASDI today. Tying cap and tier raises to growth in top quintile wage growth would insure that 90% would always be captured (it's currently tied to CPI-W).

2) Well it's currently 6.2% on the employee side and 6.2% on the employer side, so that's 12.4%. Of course that includes Medicare Part A, and Unemployment Insurance as well as disability (and Social security). Since it's a percentage of wages it should be fine so long as wage inflation tracks with inflation of health care costs, but I wouldn't suggest tying our hands when it comes to funding. This comes from my experience with Prop 13. Never give away the ability to raise taxes.

3) This is insanely stupid. The government does not respond quickly to changes in demographics, and they will not alter withholding in a timely manner to save the program (especially when so many desire to kill the program). The Trust fund creates a cushion for population surges and will be eliminated by the boomer retirement as it should be. But to eliminate it before then when we need it the most will simply give the programs opponents ammunition to kill it. The beauty of the trust fund is that it keeps it away from Congress, imagine a debt ceiling scenario, except this time with the GOP threatening to literally pull the plug on grandma.

4) Not needed, raising the cap will solve the current short fall.

5) Yes, this should be done. If anything it should be lowered to reduce labor market participation.

6) I think all capital gains should be treated as income with an exemption for inflation based on C-CPI-U, but that's an alternate issue.

7) Disability fraud is investigated, and will decline if the economy recovers. I don't know enough about the specifics of marriage rules to comment on that.

I am prob ably the exception to your rule. Sure it was lower the first years I worked, about a tax on the first 3K, but that is when I earned 4K a year, so it was still a big deal to me. As it got raised to 100K, so did my salary. always had about 1 week of not paying the tax a year. Then I spent about 25 of those years self employed and paid both sides of the tax, so believe me I paid and paid, Doesn't matter, I will be just as screwed as everyone else. I think that my parents maybe did not pay the max the whole time, but times change and salaries rose until the Bush years when there was a salary freeze for the last 5 years in the last job I had (not applicable to the highest executives) .

that is not a valid statement as it has only been in the last few years that SS paid more than it brought in and that was anticipated and expected to eat into the huge surplus, until the baby boomer bump works it's way through like a mouse in a snake. SS is not a profit making company, it is a government function with people who anticipate things. Now if only it was not being undermined by the current tax cut. ....

I refuse to join AARP. I don't agree with them politically, I think they have been taken over by conservatives and now works against retirees. It is not the pro-elderly it once was. Discounts be damned. I will pay full price rather than give them my money to be under cut by these people.

Medicare is a different issue because of the way it 's purpose is expanded by congress, but not he funding. Cowards.