Impacts of Social Security Shortfalls On Millennial Couple - AMAC & Barron's
Elizabeth O’Brien writing here in Barron’s describes a new report by HealthView Services on how a millennial couple could lose more than $908,000 in lifetime Social Security benefits if Congress fails to shore up the program’s trust fund. That is because benefit cuts of 21% begin around 2034. The options for reform are tax increases, benefit cuts, and/or an increase in full retirement age (FRA). Each of those has an accompanying cost too, though less of a cost than doing nothing. For example, eliminating the cap on taxable earnings ($168,400 in 2024) and providing no added benefits in return eliminates 70% of the shortfall. It would have no impact on those whose incomes fall below the cap, but higher earners would pay more for the same future benefits. Lifting FRA gradually by one year from the current 67 to 68 would still cost HealthView’s millennial couple $324,667 in lifetime benefits. The message here is that there will be pain (it’s unavoidable due to demographics), but it can be lessened with a mix of solutions and with Congress acting sooner rather than later. Full article here.
As an example of the leading thoughts on reforming Social Security, the Association of Mature American Citizens (AMAC, Inc.) believes Social Security must be preserved and modernized. This can be achieved without tax increases by slight modifications to cost of living adjustments and payments to high income beneficiaries plus gradually increasing the full (but not early) retirement age. AMAC Action, AMAC’s advocacy arm, supports an increase in the threshold where benefits are taxed and then indexing for inflation, and calls for eliminating the reduction in people’s benefits for those choosing to work before full retirement age. AMAC is resolute in its mission that Social Security be preserved for current and successive generations and has gotten the attention of lawmakers in D.C., meeting with many congressional offices and staff over the past decade.