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Do You Have a Backup Plan? - Yahoo! Finance
If you watch this website with any regularity, you are aware that Social Security, which is an important source of income for so many American seniors, will be facing financial difficulties in less than a decade. We frequently post various stories which explain the dilemma – that Social Security now spends more than it receives in revenue, thus steadily depleting the reserves in the Trust Fund which allow full benefits to be paid. According to the Trustees of Social Security, the program will be forced to cut everyone’s monthly benefit by about 21% in 2035, unless Congress enacts reform soon. That’s a pretty dire circumstance, and one which forms the basis of this Yahoo! Finance article by Motley Fool’s Katie Brockman. In this article, Ms. Brockman talks about the Social Security issue and, although the likelihood of SS cuts is not big, she suggests that everyone should have a backup financial plan – just in case. And that is sound advice, regardless of Social Security’s financial picture. Click here to read more.
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.