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A Social Security hybrid plan could help more people save for retirement

Numerous studies show Americans are not saving enough for retirement.  At the same time, the Social Security Trustees report insolvency will occur in 2034 or 2035, with 20% or more benefit cuts across the board for all recipients.  What then should one do?  In this piece, Alessandra Malito of MarketWatch suggests a hybrid plan.  One part would be funded through taxes and another would be similar to a 401(k) plan.  Ideas like this have been proposed before.  There’s no set way funds in any supplementary Social Security account would be invested.  One strategy would center on well-diversified, low-fee funds owned by the worker.  Another might feature a portfolio of stocks and bonds or a target-date fund, which places younger workers in higher-risk investments and gradually shifts to lower-risk options as they grow older.  Read Malito’s full discussion of the issue here.

The Association of Mature American Citizens (AMAC) believes Social Security must be preserved and modernized.  This can be achieved by making modest changes in cost of living adjustments and the retirement age, with no additional taxes on workers.  AMAC advocates for a bipartisan compromise, “The Social Security Guarantee Act,” taking selected portions of bills introduced by former Rep. Johnson (R-TX) and current Rep. Larson (D-CT) and merging them with the Association’s own well researched ideas.  One component is Social Security PLUS, a new, voluntary plan that would allow all earners to have more income available at retirement.  This component is intended to appeal especially to younger workers.  AMAC is resolute in its mission that Social Security be preserved and modernized and has gotten the attention of lawmakers in DC, meeting with a great many congressional offices and their staffs over the past several years.  Read AMAC’s plan here.



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