—Apply the Social Security tax to all wages, including those above $110,100. Workers making $200,000 in wages would get a tax increase of $5,574, an amount their employers would have to match. Their future benefits would increase, too. This option would eliminate 72 percent of the shortfall. Two years ago, it would have wiped out 99 percent.
—Increase the payroll tax by 0.1 percentage point a year, until it reaches 14.4 percent in 20 years. At that point, workers making $50,000 a year would get a tax increase of $500 and employers would have to match it. This option would eliminate 53 percent of the shortfall. Two years ago, it would have wiped out 73 percent.
Workers qualify for full retirement benefits at age 66, a threshold that gradually rises to 67 for people born in 1960 or later. Workers are eligible for early retirement at 62, though monthly benefits are reduced by about 25 percent. The reductions shrink the longer you wait to apply.
—Gradually raise the full retirement age to 68 in 2033. This option would eliminate 15 percent of the shortfall. Two years ago, it would have eliminated a little more than 20 percent.
—Gradually raise the full retirement age to 69 in 2039 and 70 in 2063. This option would eliminate 37 percent of the shortfall. Two years ago, it would have eliminated about half.
Each year, if consumer prices increase, Social Security benefits go up as well. By law, the increases are pegged to an inflation index. This year, benefits went up by 3.6 percent, the first increase since 2009.
Option: Adopt a new inflation index called the Chained CPI, which assumes that people change their buying habits when prices increase to reduce the impact on their pocketbooks. The new index would reduce the annual COLA by 0.3 percentage point, on average. This option would eliminate 19 percent of the shortfall. Two years ago, it would have eliminated 26 percent.
Initial Social Security benefits are determined by lifetime wages, meaning the more you make, the higher your benefit, to a point. Initial benefits are typically calculated using up to 35 years of wages. Earnings from earlier years, when workers were young, are adjusted to reflect the change in general wage levels that occurred during their years of employment.
Tinkering with the benefit formula can save big money, but cuts to initial benefits mean lower monthly payments for the rest of a retiree's life. The average monthly benefit for a new retiree is $1,264.
Option: Change the calculation for initial benefits, but only for people with lifetime wages above the national average, which is about $42,000 a year. Workers with higher incomes would still get a bigger monthly benefit than lower paid workers but not as big as under current law. It's a cut they would feel throughout their entire retirement. This option would eliminate 34 percent of the shortfall. Two years ago, it would have eliminated almost half.
Associated Press writer Andres Gonzalez contributed to this report.
Keep up with the AP Social Security series on Twitter: http://apne.ws/NRmPSQ
Follow Stephen Ohlemacher on Twitter: http://twitter.com/stephenatap
How would you fix Social Security? http://hosted.ap.org/interactives/2012/social-security/
EDITOR'S NOTE _ Few issues directly touch as many people in the United States as does Social Security. In this third installment of a four-part series, The Associated Press examines options for shoring up Social Security's long-term finances.