Fallout from the Flurry of Social Security Changes - msnbc.com; AMAC
A sign of the times, perhaps…the Google search term “how to claim Social Security” is reported to have recently reached an all-time high. MSNBC’s newsletter editor Ryan Teague Beckwith equates this statistical happening with what appears to be a growing level of uncertainty about the future of Social Security. Added to the mix is a reported 16% year-over-year increase in pending benefit claims may further indicate that the loss of confidence in Social Security is pushing more folks to draw benefits earlier than their full retirement age. As most financial advisors will tell you, this is usually not a wise choice for those wishing to maximize their benefits over the long haul.
So, why the uncertainty? In an msnbc.com post, Beckwith asserts that the actions being taken by President Trump appear to have put many older Americans on edge regarding Social Security and its place in their retirement planning. In his post, Beckwith quotes Social Security Works president Nancy Altman stressing first, the importance of waiting to claim benefits and, second, to become active in advocating Congressional oversight to protect Social Security. Ms. Altman advises, “The correct response is not to claim benefits before you’re ready,” she said, “but to contact your members of Congress and make sure they do their jobs, including conducting oversight so that benefits are not disrupted.”
The advice from Ms. Altman for congressional members to “do their jobs” can be attributed to the simple fact that many media reports note the complete depletion of Social Security’s trust fund reserves by 2033 and the consequence of benefits being reduced by an estimated 21% at that point. This has the likely effect of upsetting current and future beneficiaries. But that doesn’t need to happen…there are solutions, with many recommendations having been submitted to Congress for actuarial evaluation over the past few decades, yet no progress has been made toward a remedy. 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 through relatively slight program modifications, including changes to the cost-of-living adjustment (COLA) process and modifications to the formulas for calculating 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 to preserve Social Security for current and future generations and has garnered the attention of lawmakers in D.C., meeting with numerous congressional offices and staff over the past decade.