Social Security

A proposal to change the program

Reducing Benefits: This can be done in various ways. Monthly benefits can be reduced by minimizing cost of living adjustments or by minimizing the primary insurance amount (PIA) for a certain average indexed monthly earnings (AIME). Other proposals include targeting reductions towards high-income retirees. Benefits can also be reduced by increasing the retirement age or imposing full taxes on social security benefits. These benefit reduction proposals are some of the simplest and cheapest to implement. If future clients expect lower benefits, they are expected to save more or work longer; all of which will have a positive effect on the economy (Midgley, 2006).

Complete privatization: one of the radical proposals is to erase the social security system and encourage individuals to save in their accounts held by private investment companies. Owners of accounts will have great discretion over their decision of investment...
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