Restructure Social Security: Mathematical Illustration #1 —

Restructure Social Security: Mathematical Illustration #1 — Increase Retirement Age From 67 to 73 Increase Retirement Age Full Retirement Age (Years) Current Proposed Note: For mathematical illustrations, we simply calculate how big a revenue increase AND / OR expense decrease each major entitlement program needs to reach financial break-even. These caiculations are merely mechanical illustrations and are not meant to portray realistic solutions. Note: Increase full retirement age to 73 will reduce average life expectancy at retirement to the same level as when Social Security was introduced in the KP late 1930s. Source: Melissa M. Favreault and Richard W. Johnson, The Urban Institute, “Raising Social Security’s Retirement Age,” 7/10. www.kpcb.com USA Inc. | What Might a Turnaround Expert Consider? 257 Restructure Social Security: Mathematical Illustration #2 — Reduce Social Security Expenses (Benefits) By 12% Reduce Social Security Benefits by 12%, Immediately & Permanently . $14,000 ------------ $13,010 ®. -12% 2 $12,000 a £ e & $10,000 2. 5 2 2 > $8,000 a 8 ie 8 & $6,000 2 Ey e $4,000 <q S g $2,000 co) > & $0 2009 2010&Beyond Note: For mathematical illustrations, we simply calculate how big a revenue increase AND / OR expense decrease each major entitlement program needs to reach financial break-even. These calculations are merely mechanical illustrations and are not meant to portray realistic solutions. Source: Social Security Administration forecast in “The 2010 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance KP and Federal Disability Insurance Trust Funds,” 8/10. (@ www.kpcb.com USA Inc. | What Might a Turnaround Expert Consider? 258 HOUSE_OVERSIGHT_020970