With the Government Shutdown and Federal Debt Limit behind us (at least temporarily) the two parties are poised to begin negotiations on addressing the burgeoning National Debt that is accelerating due to entitlements. Although Social Security is less of a threat to the long term National Debt than Medicare, reform of Social Security will be on the agenda. Current projections indicate that Social Security will not run out of money for at least 20 more years which should be reassuring for the growing soon-to-retire population.

The four items under consideration for longer term solvency of the Social Security Trust Fund include:

1.     Raise the retirement age because people are living longer

2.     Raise the amount of earnings upon which employees pay Social Security Tax

3.     Partially decouple the amount that high income earners pay into Social Security from the benefits they receive

4.     Change the yearly cost-of-living adjustment from the annual change in the Consumer Price Index (CPI) using an alternate Consumer Price Index that factors in consumer behavior in response to price increases in consumer goods.

Probably, all four of these measures to solve the Social Security problem will be on the table, but it is hard to believe that any change will occur within the current political climate because it is too easy to kick the can down the road, especially with a 20 year cushion before Social Security can no longer pay out benefits.