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Social Security For Dummies, 2nd Edition by Jonathan Peterson

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Appendix C

Play the Game: You Make the Choicesto Strengthen Social Security

There’s no mystery about Social Security’s projected shortfall. Policy experts have a good idea of its size, and they have a good idea of the sorts of measures that would close the gap. Most measures fall into two broad categories: tax increases and benefit reductions. A package to address the gap can include both of these approaches, and it can rely more heavily on one than the other.

You don’t have to leave it to the wonks in Washington to figure it out. In this appendix, you can create your own fix-it plan for Social Security, closing the money gap the way you think best. By going through the exercise, you can compare your own priorities to what you hear in the news. (See Chapter 17 for a more detailed discussion of the policy choices.)

Table C-1 lists major proposals to boost revenues coming into Social Security. Table C-2 lists major policy options for reducing benefits. In each table, you see estimates of how far each choice goes toward fixing the shortfall. For example, row two in Table C-1 shows that raising the payroll tax to 6.45 percent each on employers and employees closes 9 percent of the gap. If you prefer that option, place a check mark next to it and write “9%” in the far-right column of row two; then you need to make additional choices, adding up to 91 percent, to solve 100 percent of the problem.

Table C-1 Ways You Can Increase Revenue

Row

Revenue Increases

Share of the Solvency ...

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