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Jun 26, 2025  |  
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Dominic Pino


NextImg:The Corner: Other Countries Have Fixed Their Social Security Programs

What these countries didn’t do is rely on tax increases to keep benefits growing.

The annual Social Security trustees’ report came out this month, and it tells the same old story everybody knows: The program is financially unsustainable. Benefits are automatically scheduled to be cut by 23 percent in 2033, and Congress made an already bad situation slightly worse by passing a giveaway to government workers during the lame-duck session last year.

Less known is that other countries have successfully reformed their social security programs. A new report from Romina Boccia and Ivane Nachkebia from the Cato Institute sheds light on these positive stories from abroad.

As they point out, the basic reason for U.S. Social Security’s insolvency is the aging population, which is a common characteristic across the developed world. As countries get richer, people live longer and choose to have fewer kids, on average, which strains government retirement programs designed under earlier demographic conditions.

Other rich countries have hit the breaking point on their retirement programs before the U.S. Boccia and Nachkebia point to four countries that have successfully reformed their social security programs to be sustainable today:

These approaches are different from one another, but all of them are more sustainable than Social Security. It’s also important to note what these countries didn’t do: rely on tax increases to keep benefits growing. The CBO estimates that Congress would need to raise the Social Security payroll tax rate by 35 percent to keep benefits fully funded in the long term. That’s not a good idea for workers or for the government. Look abroad for reforms to benefits that have worked.