These Data Points Show That Social Security Income Is Essential

Social Security has long been considered a third rail in American politics. It's better for lawmakers to stick to silence or to platitudes, the conventional wisdom goes, rather than risk raising the ire of the voting public with substantive policy recommendations. However, while few Washington watchers anticipate a major legislative breakthrough, experts are asking whether the Social Security status quo could be changing this election cycle as the program's shaky financial position becomes more of a present threat than a future issue. Indeed, the two major presumptive candidates for president have already sparred over Social Security topics, and members of Congress have been introducing and debating all manner of "fixes" to the Social Security system. A recent Republican proposal, for example, includes a bipartisan fiscal commission to examine "fast tracking" potential cuts to Social Security and other entitlements. A Democrat-backed bill introduced in January, on the other hand, would repeal taxes on Social Security benefits while raising the cap on wages subject to the payroll tax. Researchers and academics also weigh in, including by promoting a debate about whether to do away with 401(k) plan tax breaks to "save" Social Security. Opinions differ on that and many other big questions about the program's future, but there is near universal agreement about the importance of retirement insurance payments to Americans across the income spectrum. Those who need a refresher on the facts can reference a recently published report from the Investment Company Institute, a trade group representing the mutual fund industry. The analysis, penned by ICI economists Peter Brady and Steven Bass, shows in granular detail just how much income is replaced for the typical American retiree across a series of 20 income ventiles. See the accompanying slideshow detailing eight findings on the relevance of Social Security across the wealth spectrum.