Friday News Roundup: Social Security’s Projected Insolvency A Hot Topic
This morning’s crop of Google Alerts on Social Security brought with it a sampling of eye-catching headlines. For example, Newsweek‘s “Social Security Shortfall Could Turn US Into Venezuela by 2032” and SILive.com‘s “Social Security Doomsday Clock is ticking: Here’s how much money seniors could lose in 6 years.” And Investopedia weighed in with “Social Security Has Problems. The Solution Could Cost You.” Along with these, there have been numerous excerpts circulating following the U.S. Senate Budget Committee’s Wednesday hearing titled “Social Security: A Discussion on the Facts and the Path Forward.”
While the constant deluge of negative news about Social Security’s future may be unsettling, it should also be reassuring in the sense that Congress is beginning to focus on the problem. Six years, after all, is a pretty short runway for a program that has served commendably for over nine decades. Although the March 25 Budget Hearing Committee hearing was short on specific direction for problem resolution, it’s likely that the recognition of a near-range disaster for America’s Seniors is beginning to grow in importance as the calendar winds down.
Help is on the way
Many organizations are working toward the common goal of ensuring Social Security’s long-term viability. One such organization–the Association of Mature American Citizens (AMAC)–has developed a proposal to address the insolvency issue, based on the premise that 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 minor 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 steps to ensure that a larger percentage of total worker earnings are subject to FICA/SECA payroll taxes. Other changes advocated by AMAC include (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 drawn the attention of lawmakers in D.C., meeting with many congressional offices and staff over the past decade. Most recently, the suggested legislative framework has been reviewed with Social Security Administration officials. For more information on the AMAC proposal, read the “AMAC Social Security Guarantee” document on their website.