AMAC’s Revamped Social Security Guarantee Now More Important Than Ever - AMAC
The election may be in the rear view mirror, but Social Security’s long term problems await action by the President and Congress. AMAC believes the promise to guarantee Social Security for all Americans must be kept. Our goal since first introducing our Social Security Guarantee (SSG) seven years ago has been to preserve this important program for current and near retirees and to also modernize it for successive generations.
Our proposal has three prime directives: guarantee an increase in benefits for those with lower earnings; achieve solvency to ensure promised benefits continue; and provide a means for all earners to have more income available at retirement with Social Security PLUS, a supplemental voluntary companion benefit that would provide tax advantaged access to additional funds for all workers at age 62.
The Social Security Board of Trustees issues a yearly report that has increasingly noted the precarious health of the program’s long term finances. By 2034 or 2035, full promised benefits will no longer be able to be paid. Every recipient’s monthly check will be reduced by about 23% automatically. The Covid-19 pandemic has fast forwarded the insolvency date to 2029 according to many experts, due to high unemployment and many people retiring earlier than planned. Thus, AMAC believes we cannot wait past the 2021-22 Congress to act.
AMAC has made some modest yet important changes to an earlier SSG to try to shore up the health of this vital program without raising payroll taxes on workers. The changes include diverting existing retirement penalty taxes into the trust fund, recalculating the Windfall Elimination Provision to be fairer to certain public employees who have also contributed to the program through work in the private sector, and certain changes in the full and maximum retirement ages to reflect the reality of greatly increased longevity. As in our previous version, the earliest retirement age remains at 62 for those who wish not to or are unable to continue working.
Our Social Security PLUS companion piece is in addition to traditional Social Security and has tremendous potential to allow workers to build significant wealth over time. Consider that a 23-year old contributing just $25 per week with a $15 employer match, with each adding just 4% annually in a mix of conservative and stock funds, would accumulate over $1 million by age 65.
AMAC has been pleased with the reception that members of both parties in Congress have given our SSG over the past several years. We know members understand the long-term challenges facing Social Security and the importance of the program for the 65 million who receive benefits. AMAC wishes to be part of the solution to preserving this vital program and updating it for the realities of the 21st century so that it will be there for our children, grandchildren, and great-grandchildren as it has been there for all since it was first enacted in 1935.
The full, detailed “Combined Social Security Guarantee and Social Security Plus Initiative” can be found on our website here.