The 2016 Annual Report of the Board of Trustees of Social Security has painted a bleak picture of the future of the Social Security program. Due to a combination of factors, including the retirement of baby boomers and lengthening life expectancies, the program will likely soon come under significant financial strain. Under current law, the trustees project that the program’s trust fund will be completely depleted by 2034, at which point all beneficiaries would face across the board cuts of up to 21% of their benefits. This could be catastrophic for the retirement security of millions of Americans, who rely on Social Security to provide them with an adequate and stable level of income after retirement. Any benefit cuts would be especially problematic for low-income Americans, for whom these benefits often make up more than 80% of their incomes. Luckily, there are a few steps that Congress can take towards fixing Social Security’s unsustainable finances that would protect millions of Americans from facing severe financial hardship in retirement.

First, the unequal method of taxation that is used to fund Social Security must be addressed. The program is funded through payroll taxes, which are automatically deducted from all eligible workers’ paychecks. However, there is currently a payroll tax cap, which means that in 2017, only wages up to $127,200 will be subject to the tax. When this taxable maximum was initially set, it covered a much larger proportion of total income than it does today. Due to rapid wage growth inequality, payroll taxes currently cover only 81% of earnings, which is one of a variety of factors that has contributed to Social Security’s financial woes. Eliminating the payroll tax cap would not only significantly help cover the program’s current funding gap, but would also create a more equitable distribution of payroll taxes. The current system unfairly burdens low and middle-income Americans, who pay a much higher share of their overall income in payroll taxes than the highest earners do. It is crucial that Congress consider this policy option, and sooner rather than later, as the longer reform is delayed, the less of an impact this would have on alleviating Social Security’s financial issues.

Another option to address America’s retirement insecurity problem is to strengthen incentives for individuals to save for their own retirement, as well as ensuring that there are adequate resources available for people to accomplish this. Through the use of beneficial vehicles, such as automatic 401(k) enrollment, a greater number of people will begin saving up their own nest eggs for retirement sooner, leaving them less reliant on Social Security to sustain them in retirement.

Essentially, it is important to both strengthen Social Security so that it remains the crucial safety net it has been for millions of retired Americans, as well as make it easier for people to start saving for retirement on their own. These options, taken together, can help address the serious issue of retirement insecurity in America, and maintain the strong Social Security program that the United States has enjoyed for the past 80 years.