The Financial Status of Social Security - Yahoo! Finance
Is Social Security really “going broke?” Well, it is not, because SS benefits will always be there as long as American’s are working and contributing to the program. But Social Security IS facing financial issues in about 6 years because incoming SS revenue is less than needed to pay full SS benefits. Without Congressional attention, that could mean an across the board benefit cut of about 23% for every beneficiary. This article accurately describes the financial issue SS is facing and what must be done to resolve it. As the article suggests, the options for reform must include either increased SS revenue (e.g., more SS taxes), or scaled back benefits (e.g., increasing SS full retirement age), or some combination of both. In any case, the longer Congress waits to act, the harder the choices will become. Click here to read this Yahoo! Finance article by Hal Bundrick.
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.