Clarifying Social Security Terminology - MSN
There is little doubt that Social Security uses many different terms and jargon describing who is eligible for benefits, and when they might claim those benefits earned from a lifetime of working. If you need an example of the myriad SS terminology, just take a gander at this link! Of course, probably no Social Security terms are more important than those referring to the age at which you claim benefits, and how claiming at various ages will affect your monthly Social Security retirement benefit amount. Specifically the term “Full Retirement Age” or more simply “FRA” is the fundamental point at which you receive 100% of the benefits you are entitled to from a lifetime of working. Claiming before FRA means a permanent cut in your monthly benefit, and claiming after FRA provides a higher monthly payment. So your “Early Eligibility Age,” “full retirement age” (FRA), and “Delayed Retirement Age” are important things to be clear about.
Now, in the face of a significantly important financial crisis faced by SS in 2032, Congress is at least focusing more intently on Social Security issues in a bipartisan way. A new bipartisan bill, called the Claiming Age Clarity Act (H.R. 5284) has been introduced on the House floor to provide a much clearer way to describe a beneficiary’s claiming options. The bill would make SSA change their terminology to more accurately describe (through implication) how monthly SS benefits will be affected by the age at which benefits are claimed. This MSN Moneywise article by Vishesh Raisinghani provides all the details.
Although this new bill (H.R. 5284) doesn’t specifically address Social Security solvency, it is a good example of how Congress can work together for the overall good of SS beneficiaries. As relates to solvency, and 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.