Declining mortality rates do not bode well for Social Security - Fortune
“Mortality rates are declining, and living beyond 90 is in reach for many, as medical advancements have made it possible to live longer than ever before.” That statement is the key thrust of this Fortune magazine article about how changing demographics are affecting our future. People are now living a lot longer than just a few years ago, which results in a forecast of a “demographic cliff” in 2033. That, coincidentally is the date that the Trustees of Social Security predict the Social Security Trust Funds will be depleted, thus requiring at cut of about 21% in everyone’s monthly Social Security benefit.
At a recent symposium, financial experts gathered to discuss the economic effect that increased life expectancy, coupled with declining fertility rates, will have on the American society. The experts at this symposium nearly unanimously agreed that a long term solution is needed to prevent a catastrophic outcome in 2033. Click here to read this Fortune article by Alexa Mikhail.
As an example of the leading thoughts on reforming Social Security, the Association of Mature American Citizens (AMAC, Inc.) believes Social Security must be preserved and modernized to meet the demands of 21st-century economics. AMAC’s position is that this can be achieved without payroll tax increases via relatively slight program modifications, including cost-of-living adjustment (COLA) process changes and modifications to the formulas for calculation of payments to 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) improved survivor benefits, (4) eliminating the reduction in benefits for those choosing to work before full retirement age; and (5) improved 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.