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Alicia Munnell, head of the Center for Retirement Research at Boston College Alicia Munnell, head of the Center for Retirement Research at Boston College.

Any proposal to close Social Security’s financing gap should consider the creation of a trust fund that could earn enough interest to keep the program running for the next 75 to 150 years, according to a new paper from the Center for Retirement Research at Boston College.

As it stands now, Social Security is structured as a pay-as-you go program whereby taxes on the income of current workers (and their employers) are used to pay benefits to current retirees. Due to payouts that exceeded what retirees had paid into the program when it began in the early 1930s and the declining ratio of workers to retirees, the program’s current trust funds—there are two, one for retiree benefits and one for disability benefits—are together poised to deplete their reserves by 2035. At that point, retiree benefits would be reduced by about 25 percent.

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