Bad News for Social Security Beneficiaries? - Yahoo! Finance
This article, though somewhat pessimistic, suggests that Social Security is on a collision course with insolvency in the very near future. And if you regularly read articles published on this website, you are already aware of that dilemma – the Social Security’s Trust Funds, which now supplement benefit payments, are predicted to run dry as early as 2032, requiring about a 25% cut in everyone’s monthly Social Security payment. That, of course, is sobering news for those who rely on Social Security to pay their monthly bills, but it is not (as the article seems to suggest) inevitable.
It is definitely true that, without Congressional intervention, the SS Trust Funds will be fully depleted in about the year 2032, requiring an across-the-board cut in SS for everyone. However, the only thing missing for Congress to correct this issue is the bipartisanship needed for SS reform, something that seems especially illusive in recent years. That lack of bipartisanship, along with Congress’ natural tendency to wait until the last possible moment to act, is largely responsible for Social Security’s current financial issues. Fact is, Congress already knows how to reform Social Security, but elections keep getting in the way of tackling the hard decisions which will need to be made. And, those reforms need not include raising payroll taxes (FICA) on working Americans. This Yahoo! Finance article by Motley Fool’s Kailey Hagen describes Social Security’s financial issue, and cautions us to stay informed and revisit our retirement plan as Congressional events develop.
For its part, the Association of Mature American Citizens (AMAC) has been at the forefront trying to strengthen Social Security by developing and proposing its Social Security Guarantee which restores the program to solvency without raising payroll taxes. AMAC 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. More recently, AMAC has met with the Commissioner of Social Security to discuss Social Security reform. See AMAC’s proposal for Social Security reform here.
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