Libertarian Presidential candidate Gary Johnson's plans to fix Social Security could end up being a deciding factor in his bid for the White House. Let's take a closer look at his plans to address Social Security's solvency problems, and find out whether he thinks tax increases or benefit cuts are the best approach to putting this program on firm financial ground.

Why Social Security matters

Social Security is designed to replace about 40% of a worker's pre-retirement income, but represents the lion's share of many retirees' income. According to the Social Security Administration, 74% of unmarried elderly beneficiaries receive 50% or more of their income from Social Security and 47% of unmarried elderly beneficiaries rely on Social Security for 90% or more of their income.

Those figures are staggering when we consider that the average retired American worker receives only $1,341 per month in Social Security benefits, or $16,092 per year.

Fixing Social Security's big problem

Social Security's Board of Trustees reports on the financial security of the program every year, and this year, the trustees concluded that Social Security's Trust Fund will be depleted in 2034. Further, they report that absent changes to Social Security, the depletion of the fund will result in an automatic 21% cut in Social Security benefits to all Americans.

It's up to Congress and the President what changes are best, but the Trustees did offer insight into what changes would be needed if Social Security is to be secure for the next 75 years.

The Trustees wrote that Social Security's funding problem could be addressed by an increase in payroll taxes of 2.58% to 14.98%, equivalent to a permanent reduction of Social Security benefits by 16% (if applied to all current and future beneficiaries) or 19% (if applied only to beneficiaries who become eligible beginning in 2016).

Because over 60 million Americans count on Social Security, the nominees for President agree that filling Social Security's long-term funding gap is critical. However, they disagree on how to do it.

Republican nominee Donald Trump says he'll put Social Security on firm financial ground by sparking economic growth, which in turn, will boost wages and payroll tax revenue. Significantly reducing corporate tax rates is one way he plans to spark that growth.

Democratic nominee Hillary Clinton believes that benefits to at-risk retirees, like widows, should be increased, and that benefits shouldn't be cut. Instead, Clinton favors increasing payroll-tax revenue by changing the payroll-tax income limit. Currently, the 12.4% payroll tax applies only to income up to $118,500; she's suggested a "tax holiday" on income of between $118,500 and $200,000, taxing income above $200,000.

Libertarian Gary Johnson favors cuts in benefits to bring Social Security's outlays in line with tax revenue. Johnson wants to replace all taxes, including payroll taxes, with a federal consumption tax. He also thinks that the full retirement age -- the age at which you qualify for 100% of your Social Security benefits -- should be increased from its current high of 67 to 70 or 72. Furthermore, he's said in the past that privatization of Social Security benefits should be considered, and that there should "probably" be some means testing to determine how much you receive in Social Security benefits based on your financial well-being.

Planning ahead

There's no easy fix to Social Security's shortfall. The program's spending has been outstripping payroll tax revenue since 2010, and the retirement of baby boomers means that spending will continue to grow.

Tax increases and benefit cuts aren't very palatable, but perhaps some combination can put this program back on track. If Washington fails to act, then one thing is certain: Americans have to save more now to ensure their financial security in the future.