The Social Security Administration (SSA) has projected that the wage base for 2013 will increase to $113,700 ($110,100 in 2012) due to an increase in average wages. However, the projection may change slightly when the actual increase is announced in October. The projection is part of the annual report that the SSA's trustees gives to Congress each year.
As part of the report, the trustees project that the fund will be exhausted in 2033 (three years sooner than earlier projections). The report also includes the following recommendations for keeping the Social Security program solvent:
- Increasing the combined employer and employee contribution from the current 12.4% (10.4% in 2011 and 2012) to 15.01%, which is a 21% increase;
- Reduce scheduled increases in benefits in a manner equivalent to a reduction in benefits of 16.2%;
- Draw on alternative sources of revenues (i.e., other types of taxes);
- Or a combination of the three.
Click here to read a copy of the report. It is only 252 pages long.
These changes are very politically tough to do and it will be interesting to see what happens and when.