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Social Security’s asset reserves explained
Not since 1982 has Social Security run a deficit (pay more in benefits than is collected in payroll taxes) until 2018. For 35 years, then, asset reserves have built up, as explained by Sean Williams in this Motley Fool article, that can be used to fund current benefits through 2034. Williams also notes, though, that the concept of reserves is irrelevant. This is because Social Security can always pay benefits without them, though lower starting in 2034 unless Congress acts before then, as long as there are workers paying taxes (currently 12.4% split between employee and employer). Taxation of benefits, which also brings in revenue, will continue too. Read the full article on reserves here.
Note, The Association of Mature American Citizens (AMAC) has developed a bipartisan compromise, “The Social Security Guarantee Act,” to strengthen Social Security for present and future generations with modest changes now to head off across the board cuts for all. The plan takes selected portions of bills introduced by Rep. Sam Johnson (R-TX) and Rep. John Larson (D-CT) and merges them with the AMAC’s original legislative framework to create the new Act. AMAC is resolute in its mission to get the attention of lawmakers in DC, meeting with many congressional offices and their legislative staffs over the years. Learn more about AMAC’s Social Security Guarantee here…