Recent news from the Social Security Administration’s (SSA) Office of the Chief Actuary indicates that the Social Security wage base will increase from $110,100 presently to $113,700 in 2013, or an increase of about 3.27%. This projection was included in a recent annual report to Congress by the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Fund programs.
More upsetting, however, is the longer term outlook, which suggests that the trust fund assets will decline beginning in 2012, and the current benefit payment levels cannot be sustained after 2033 – three years earlier than previously projected.
And if you think there is no end in sight for continual increases in the wage base, you’re right – the SSA expects continual annual increases up to $161,700 by 2021!
The report encourages legislators to get on top of this – and now, by including four recommendations for keeping the Social Security program solvent:
- Immediately and permanently increase the combined employer and employee FICA rate from 12.4% to 15.01%;
- Reduce scheduled Social Security benefits in a manner equivalent to an immediate and permanent reduction of 16.2%;
- Draw on alternative sources of revenue; or
- Adopt some combination of these approaches.
Don’t hold your breath.