Solving Social Security’s Financial Woes - Plan Sponsors Council of America
If you read the news at any level, you are surely aware that the nation’s premier retirement program – Social Security – is facing some serious financial issues in the near future. In fact, the latest report from the Congressional Budget Office (CBO) suggests that the program’s financial reserves are likely to run out in the year 2032, resulting in an across-the-board reduction in benefits of about 23% for everyone then collecting. And, considering that a majority of beneficiaries say that Social Security represents a major part of their retirement income, that is not a pleasant thought for American seniors.
So what do the so-called financial experts and SS watchdogs say about this dilemma? This timely article by the Plan Sponsor Council of America (PSCA) reports on a recent panel discussion at a symposium of retirement planners whereat several experts offered their analysis of the issues faced by Social Security as well as the options for reforming the program. The one thing that stands out is that even these experts are struggling to agree on the best course of action to reform the program. Click here to read this important article about Social Security’s future.
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.