Concerns About Social Security Instability Fuel Drop in Retirement Confidence - investmentnews.com; AMAC
Given the steadily rising media attention to Social Security’s looming insolvency, it should come as no surprise that workers–and even more so, retirees–are expressing growing anxiety about their ability to manage finances in retirement. A recent study by the Employee Benefit Research Institute (EBRI) and Greenwald Research amplified this, noting an across-the-board drop in confidence “… tied to inflation, debt, healthcare expenses and the long-term stability of Social Security and Medicare.”
InvestmentNews’ Steve Randall, in a post on their website today, examines these survey results through the lens of retirement planning, noting that “… retirees are increasingly worried about the future of Social Security and Medicare.” One of the results, Randall notes, is an increase in the number of workers delaying their planned retirement, while some are canceling their retirement plans altogether.
The EBRI/Greenwald study is but one example of the growing uneasiness caused by the continually surfacing news accounts of a substantial drop in monthly Social Security benefits–some suggest as large as 28%–projected to hit seniors and dependents about six years from now, perhaps sooner. Since this problem has been on the table for over four decades, with virtually no long-term corrective action, it’s understandable that skepticism among those most affected is mounting. Something needs to be done, and done sooner than later, so that effective changes can be implemented with as little shock and disruption as possible.
A Pathway to Solvency
The Association of Mature American Citizens (AMAC) has long focused on this problem and has developed a 15-point plan to address insolvency and preserve Social Security for generations to come. This plan, the AMAC Social Security Guarantee, is a thoroughly researched and well-balanced proposal that examines the entire Social Security structure and recommends a series of adjustments and formula changes to realign Social Security with the 21st-century economy.
The AMAC plan, through relatively slight program modifications, would achieve solvency without payroll tax increases and would include changes to the age at which benefits are maximized, redistribution of cost-of-living adjustments, and modifications to the formulas for calculating payments to higher-income beneficiaries. We also recommend an increase in the thresholds where benefits are subject to income tax and indexing of these thresholds annually to account for inflation, along with improved survivor benefits, eliminating the reduction in benefits for those choosing to work before full retirement age, and improved savings tools for future retirees, including a savings option that builds estate value.
Further, the AMAC plan would guarantee solvency and pave the way for Social Security to honor the obligations to those who have earned their benefits through a lifetime of participation in the American workforce.