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Social Security faces insolvency by 2032, forcing policymakers to weigh politically fraught options like raising the retirement age, raising taxes, or adjusting benefit caps. Commissioner Frank Bisignano said “everything’s being considered,” as America’s retiree population surges. While the demographic shift threatens long-term economic sustainability, the wave of retirements is temporarily helping hold unemployment near 4.3% despite weak job growth.
Like many developed nations, the U.S. is wrangling with a complex question: How to pay for the care and support of an aging population. Many of the answers to that question won’t be popular, but governments are aware of the need to address the issue before crisis hits.
In America, that timeline is set to seven years. The Committee for a Responsible Federal Budget estimates that Social Security’s retirement trust funds will be insolvent by the end of 2032.
As such Trump’s Social Security Administration Commissioner, Frank Bisignano, needs to workout the landscape for the next generation of retirees.
When asked if plans to redress the issue may include raising the retirement age, Bisignano told Fox Business yesterday: “I think everything’s being considered, will be considered.”
He added: “Remember, most people told you and I Social Security wasn’t going to be around, and it’s going to be around. And so the generations that are coming in will probably have a different set of rules than we had.”
The number of people wrangling with the new reality of retirement is staggering. The Congressional Budget Office (CBO) estimates the Social Security area population (the relevant demographic for estimating payroll taxes and benefits as individuals reach retirement age) will increase from 342 million people in 2024 to 383 million people by 2054.
And this equilibrium of individuals supported by state benefits versus workers to pay into the system to support them is not a use which the CBO believes will be rebalanced anytime soon. In its estimation due to low fertility rates, all population growth from 2040 onwards will be as a result of immigration.
Bisignano added that raising the retirement age—currently set at 65—isn’t the only option on the table, saying there is “a whole host of items out there than can be hugely beneficial to get to the answer.”
Another consideration is the earnings cap at which benefits are phased out. While Bisignano said this figure—currently $175,000—will continue to go up, he added: “It’s another thing to put in the equation to think about.”
The Social Security chief added his team isn’t pushing the panic button yet, saying: “It’s really about solving it. Eight years is a long time away.”
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