Brian J. O'Connor

A group of Senators is working on a plan to shore up Social Security by potentially raising the full retirement age, along with other changes to how Social Security benefits are financed. Here's what you need to know.

A financial advisor can help you create a financial plan for your retirement needs and goals.

How Will the New Social Security Plan Affect Retirees? Work on the plan, which was first reported by the online news site Semafor, is being led by Senators Angus King, (I-Maine) and Bill Cassidy (R-Louisiana). It also would include changes to the way retirement benefits are calculated and the creation of a federally-backed investment fund that would generate revenue to support benefit payments.

The state of Social Security financing is getting a lot of attention now and is expected to get even more as the 2024 elections approach. While the Social Security system isn't in any danger of becoming bankrupt, the trustees who oversee Social Security and Medicare have reported that the surplus in the trust fund used to pay for the plans will run out sometime in 2035.

You should note that payroll taxes supporting the plans will continue to bring in revenue for benefit payments, but those collections would be about 20% short of the total amount needed. At that point, Congress would have to find other revenue or adjust the benefit rules and payroll tax schedules.

The plan being formulated by King and Cassidy would amount to a benefit cut, experts said, by reducing the overall total of Social Security payments collected in a retiree's lifetime. Extending the age to start collecting benefits also means that many more workers will die before becoming old enough to collect any Social Security checks.

The Social Security Administration already estimates that one out of every eight of today's 20-year-olds will die before reaching age 67, while Stanford University estimates that 20% of people born in 2015 will die before reaching age 70, for example.

Though some have suggested part of this plan could involve moving the federal retirement age to 70, a spokesperson for Cassidy's office added extra nuance to the matter.

''No final decisions have been made on our proposal, but I can say none of the options change the retirement age for current seniors or anyone within decades of retirement,'' she said.

Though this phrasing excludes the possibility that the full retirement age could get moved back for those close to retirement, it seems to imply that a change to retirement age for people born after a certain date might be in the cards.

''We're waiting on the president to engage to figure out the final details,'' said Cassidy's spokesperson. ''So that would be a decision for the president...Down the line when the president decides to engage, that is a decision that will need to be made.''

How Will the New Social Security Plan Get Funded? The King and Cassidy plan would rely on borrowing $1.