Social Security: A 2025 Financial Picture - Wolf Street
Social Security is America’s most important retirement program, providing financial assistance in retirement for over 70 million Americans. Indeed, about half of all those receiving Social Security benefits say that it is a “major” source of their retirement income. And, for some, it is their only source of money in their “golden years.” All of which means that Social Security is extremely important to nearly everyone, and especially senior citizens.
But Social Security is facing a crucial period of time. Incoming revenue to the program has advanced only slowly and is now insufficient to pay 100% of needed benefits. Thanks to intelligent bipartisan moves by Congress and President Reagan in the 1980s, the SS Trust Fund accumulated about $2.8 trillion in reserves by the year 2000. But declining birthrates, an influx of beneficiaries, and increased life expectancy created a “perfect storm” which now depletes the Trust Funds, causing the program to face insolvency in the year 2033, as explained in this very insightful piece by Wolf Richter appearing at the Wolf Street publication. Click here to read more.
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 to meet the demands of 21st-century economics. AMAC’s position is that this can be achieved without payroll tax increases via relatively slight program modifications, including cost-of-living adjustment (COLA) process changes and modifications to the formulas for calculation of payments to higher-income beneficiaries. Changes to the age for maximizing benefits are included in AMAC’s position, along with (1) an increase in the thresholds where benefits are subject to income tax; (2) indexing of these thresholds annually to account for inflation; (3) improved survivor benefits, (4) eliminating the reduction in benefits for those choosing to work before full retirement age; and (5) improved savings tools for future retirees, including a savings account that builds estate value. 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.