Increase the early and normal retirement ages. We should do this even if there were no long-term imbalance and even if all the saving were devoted back to Social Security. Increasing the retirement age would allow us to devote greater resources to the truly old, since it has no effect on benefits at later ages. Relative to other benefit cuts, it would provide higher annual benefits, since a delay of even one year in retiring can often increase annual income by 8 to 10 percent for many individuals. At any given tax rate, it provides for a higher lifetime benefit since it results in increased revenues from working longer. It also provides relief for Medicare through higher Medicare taxes, and for the rest of the budget through higher income tax revenues.
For all these reasons, an increase in the retirement ages (including the early retirement age, else it is just an across-the-board benefit cut) causes the least hardship of almost any benefit cut.