Why We Should Expand-Not Cut-Social Security

Social Security is a big piece of most Americans’ retirement. The program, however, is running out of money and conservative politicians, including those in the new Republican-majority House of Representatives, want to cut it. In this essay, adapted from his new book RETIREMENT REBOOT: COMMONSENSE FINANCIAL STRATEGIES FOR GETTING BACK ON TRACK Agate Publishing, January), veteran financial journalist Mark Miller argues that fixing and beefing up Social Security is affordable, practical and necessary.

- MARK MILLER

WITH A NARROW AND HIGHLY FRACTIOUS REPUBLIcan minority now in control, it is a safe bet the House of Representatives will be the site of loud debates over government spending in the coming months. As part of the fighting over things like raising the debt limit, expect to hear renewed talk about reforming Social Security.

The GOP has made clear that what they mean by reform is cutting benefits. They'll argue that we cannot afford Social Security and that the program is going bankrupt. Both arguments are false. Social Security does face a long-expected shortfall in the years ahead but closing the gap is a manageable task. And we need to do more than simply close the program's funding gap. Millions of Americans are approaching retirement confronting a devastating decline in their standard of living.

The best remedy is to expand Social Security benefits, not cut them. The most important measure of financial readiness to retire is your ability to replace working income after you retire, in other words, your ability to maintain your standard of living. Financial planners say most people will need to replace at least 70 percent of their wage income in retirement.

Anyone who has not been able to save much for retirement will depend solely on Social Security, which typically replaces only about 40 percent of pre-retirement income. Federal Reserve data indicate the median balance in a retirement account in 2019 for a working household nearing retirement (age 55-64) was just $144,000, an amount that will not last very long in retirement. And far too many have not been able to save anything at all.