An Assessment of Potential Social Security Solvency Solutions - AOL.com
As we’ve been noting for some time, the emphasis on reforming America’s Social Security program in the face of the rapidly approaching solvency crisis is beginning to draw attention in the early months of the 118th Congress. Many credible sources are coming forward with recommendations to consider, and what is emerging is, as expected, two distinct viewpoints on the appropriate underpinnings of a solution to the crisis now less than a decade away. One side of the ledger is biased toward modernizing Social Security to align with 21st-century economics by adjusting rules and formulas, while the other side focuses more on bolstering program revenue via tax increases. What will develop into a viable solution for current and future program beneficiaries remains to be seen as lawmakers grapple with the suggestions put forward.
In a post today on aol.com, BankingRates’ Jamela Adam provides a perspective on the contrasting approaches, assessing benefit reduction suggestions in comparison to tax increase suggestions. Her post, which begins with a brief review of how Social Security is funded, outlines three fundamental tactics on each side of the argument, and concludes with an opinion expressed by political scientist and business law assistant professor Nicholas B. Creel of Georgia College & State University in favor of the proposition of removing the cap on earnings subject to payroll tax as a move that “seems to be the most sensible option.”
Ms. Adam concludes by noting the unpredictability of Congress’ action on the solvency dilemma and stressing the importance of building a self-funded financial position as a strategy to protect–as much as possible–oneself from these uncertainties. Read Ms. Adam’s post here.
Also, while this issue is top of mind, consider that the Association of Mature American Citizens (AMAC) has crafted an approach to resolving the impending catastrophe by implementing modifications to cost of living adjustments and payments to the highest income beneficiaries plus gradually increasing the full (but not early) retirement age. AMAC’s plan also increases the threshold where benefits are taxed and then indexes these thresholds for inflation, and the plan eliminates reducing people’s benefits for those choosing to work before full retirement age. The AMAC plan preserves and modernizes Social Security, and has gotten the attention of lawmakers in D.C. See it here.