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In the News: Social Security Benefit Cap “Gaining Attention” - The Economic Times
The concept floated by the Committee for a Responsible Federal Budget (CRFB) to place a limit on the amount of Social Security benefits a single claimant, or a married couple, could draw is the topic of a post by Piyush Shukla on The Economic Times website. The proposal, dubbed the Six-Figure Limit in some quarters, would cap annual normal retirement age benefits at $100,000 for married couples and $50,000 for individuals, and has generated considerable discussion on the pros and cons of this form of means-testing. The use of this type of benefit restriction would, of course, reduce outlays from the program’s assets, but would likely not represent a complete solution to the overall insolvency problem Social Security faces. Read the Piyush Shukla post in full here…
When Congress begins to focus on resolving the Social Security insolvency problem, the CRFB proposal will be on the table for discussion, alongside myriad proposals and suggestions to modernize Social Security to better adapt to the economics of the 21st Century. 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.