Policy Option Projections
Projected Effects on Beneficiaries—Summary Comparisons
| 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 | |
| Benefit formula changes | |||||||||
| Credit earnings to caregivers' records | |||||||||
| Up to 5 years at one-half average wage when caring for children under age six | 0% | 1% | 22% | 0% | 1% | 27% | 0% | 1% | 29% |
| Increase the computation period from 35 years | |||||||||
| To 40 years (does not apply to DI) | -1% | 55% | 0% | -4% | 80% | 0% | -4% | 83% | 0% |
| Price index the PIA formula | |||||||||
| Reduce the formula factors by the difference in growth rates of wages and prices | -1% | 53% | 0% | -21% | 95% | 0% | -37% | 100% | 0% |
| Protect the bottom 30% of workers from price indexing | 0% | 37% | 0% | -10% | 74% | 0% | -18% | 78% | 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 level | 0% | 0% | 12% | 0% | 0% | 16% | 0% | 0% | 17% |
| Reduce the 90%, 32%, and 15% PIA factors | |||||||||
| To 90%, 21% and 10% over a 31-year period | -3% | 66% | 0% | -12% | 93% | 0% | -17% | 95% | 0% |
| To 69.2%, 24.6%, and 11.5% over a 28-year period | -2% | 55% | 0% | -17% | 89% | 0% | -22% | 92% | 0% |
| Reduce initial benefits | |||||||||
| By 5% | -4% | 71% | 0% | -5% | 95% | 0% | -5% | 97% | 0% |
| Cost of living adjustment changes | |||||||||
| Reduce the cost of living adjustment | |||||||||
| Base it on the Chained CPI | -3% | 89% | 0% | -3% | 89% | 0% | -3% | 90% | 0% |
| Covered worker changes | |||||||||
| Cover all newly hired state and local workers | 0% | 0% | 3% | 0% | 0% | 9% | 0% | 0% | 16% |
| Retirement age increases | |||||||||
| 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% | 17% | 0% | 45% | 26% | -2% | 53% | 28% |
| Increase the FRA from 67 | |||||||||
| At a rate of 1 month every 2 years starting in 2023 | 0% | 13% | 0% | -3% | 69% | 0% | -8% | 82% | 0% |
| To 68, at a rate of 1 month every 2 years | 0% | 13% | 0% | -3% | 69% | 0% | -6% | 81% | 0% |
| Taxation changes | |||||||||
| Increase Social Security payroll tax from 12.4% | |||||||||
| To 14.6% and then to 16.8% in 2054 | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% |
| Increase the earnings subject to taxation | |||||||||
| All earnings, credit for benefits | 0% | 0% | 9% | 0% | 0% | 18% | 0% | 0% | 21% |
| 90%, credit for benefits | 0% | 0% | 8% | 0% | 0% | 18% | 0% | 0% | 21% |
| Note: These results are based on specifications given to staff in the Social Security Administration's Office of Retirement Policy. They do not represent an SSA proposal nor do they reflect the views of the agency. | |||||||||
| Source: SSA's Office of Retirement Policy, using MINT 6/TR11 Assumptions/SSMBA 4.0. | |||||||||
| 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 | |
| Benefit formula changes | ||||||
| Credit earnings to caregivers' records | ||||||
| Up to 5 years at one-half average wage when caring for children under age six | 27% | 0% | 100% | 30% | 0% | 100% |
| Increase the computation period from 35 years | ||||||
| To 40 years (does not apply to DI) | 22% | 0% | 99% | 24% | 0% | 100% |
| Price index the PIA formula | ||||||
| Reduce the formula factors by the difference in growth rates of wages and prices | 0% | 47% | 50% | -18% | 93% | 5% |
| Protect the bottom 30% of workers from price indexing | 14% | 16% | 80% | 5% | 40% | 57% |
| 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 level | 27% | 0% | 100% | 30% | 0% | 100% |
| Reduce the 90%, 32%, and 15% PIA factors | ||||||
| To 90%, 21% and 10% over a 31-year period | 11% | 8% | 86% | 6% | 9% | 77% |
| To 69.2%, 24.6%, and 11.5% over a 28-year period | 5% | 3% | 68% | 1% | 3% | 96% |
| Reduce initial benefits | ||||||
| By 5% | 21% | 0% | 100% | 23% | 0% | 100% |
| Cost of living adjustment changes | ||||||
| Reduce the cost of living adjustment | ||||||
| Base it on the Chained CPI | 23% | 0% | 100% | 25% | 0% | 100% |
| Covered worker changes | ||||||
| Cover all newly hired state and local workers | 27% | 0% | 100% | 30% | 0% | 100% |
| Retirement age increases | ||||||
| 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) | 27% | 3% | 97% | 27% | 3% | 97% |
| Increase the FRA from 67 | ||||||
| At a rate of 1 month every 2 years starting in 2023 | 23% | 1% | 99% | 19% | 2% | 98% |
| To 68, at a rate of 1 month every 2 years | 23% | 1% | 99% | 21% | 1% | 99% |
| Taxation changes | ||||||
| Increase Social Security payroll tax from 12.4% | ||||||
| To 14.6% and then to 16.8% in 2054 | 27% | 0% | 100% | 30% | 0% | 100% |
| Increase the earnings subject to taxation | ||||||
| All earnings, credit for benefits | 27% | 0% | 100% | 30% | 0% | 100% |
| 90%, credit for benefits | 27% | 0% | 100% | 30% | 0% | 100% |
| Note: These results are based on specifications given to staff in the Social Security Administration's Office of Retirement Policy. They do not represent an SSA proposal nor do they reflect the views of the agency. | ||||||
| Source: SSA's Office of Retirement Policy, using MINT 6/TR11 Assumptions/SSMBA 4.0. | ||||||