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Changes to Social Security are Coming Soon (hopefully) - Yahoo! Finance
If you are searching for good news about Social Security’s looming financial insolvency, it can be found in a recent estimate by Social Security’s actuaries that the Trust Fund balance wasn’t depleted as much as anticipated in 2025. But that’s modest good news in the face of a serious looming disaster, for Social Security’s Trust Funds will be depleted as early as 2032 – a mere 6 years from now. And what does that mean? It means that the depleted Trust Funds can no longer supplement benefit payments, which will result in an across-the-board 23% to 25% cut in everyone’s monthly Social Security benefit. But that is only if Congress fails to enact Social Security reform soon.
This Yahoo! Finance article by Motley Fool’s Adam Levy offers a good description of the problem (although it fails to mention the negative implications of the Biden Administration’s enactment of H.R. 82 – the Social Security Fairness Act which will cost Social Security nearly $200 billion over the next decade). The article it also provides some insight into possible solutions to Social Security’s financial issues. Click here to read more.
As an example of leading thinking on reforming Social Security, the Association of Mature American Citizens (AMAC, Inc.) believes Social Security must be preserved and modernized to serve future generations. AMAC’s position is that this can be achieved without payroll tax increases through relatively minor program modifications, including changes to the cost-of-living adjustment (COLA) process and modifications to the formulas for calculating initial benefits for 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) changing the taxable maximum formula to address the unintended loss of revenue; (4) improving survivor benefits, (5) eliminating the reduction in benefits for those choosing to work before full retirement age; and (6) improving 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. See AMAC’s proposal for Social Security reform here.