Beware of These 3 Social Security Pitfalls in Retirement
While people appreciate it when they finally begin collecting a monthly Social Security benefit, Maurie Backman notes folks might also encounter certain pitfalls related to Social Security. Here are a few to prepare for. The first is insufficient raises, as cost of living adjustments do not always keep pace with the kinds of items seniors buy (insurance, medicine, etc.) The second is future benefits cuts. They are looming for all at about 23% across the board in just over a decade due to funding issues related to demographics. Congress will have to do something before 2034, and none of the options is popular. Third is income taxes. Many are surprised to learn tax is due on benefits. The main problem is the thresholds have not been adjusted for inflation since 1993. Full piece here.
The Association of Mature American Citizens (AMAC) believes Social Security must be preserved and modernized. This can be achieved with no tax increases by changing cost of living adjustments, the retirement age, and delayed credits. 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 research. One component is Social Security PLUS, a voluntary plan to allow all earners to have more income 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.