On Social Security’s Solvency: Beware the Naysayers, But Also Be Informed! - AMAC Foundation, CNBC

America’s Social Security program–often described as the most successful social program in our history–is in trouble. Most everybody is aware of that, at least to some degree. The most recent Social Security Trustees Report suggests that the program’s trust fund reserves–the asset currently propping up the program–are projected for depletion by 2034, while some more recent predictions suggest an earlier arrival at this point. As a result of the clamor surrounding the trust fund projections and the severe consequences awaiting seniors, many folks aging into Social Secure eligibility appear to be harboring concern that the money will not be there for them when they need it most. In fact, age 62 is still the point at which most new filers elect to start their benefits.

The AMAC Foundation’s Social Security Advisory Service fields the question of “When to file” frequently, often from folks who’ve “heard” the program is heading for bankruptcy. While we hasten to provide a fact-based explanation of why this myth is unfounded, we also explain the consequences of a decision to file for benefits early, since many do not understand the discounting of the monthly payment and the permanence of the reduced amount. We come away from these encounters with a reinforced understanding of how news headlines can influence decision-making in an area so vital to retirement planning.

This influence is the subject of an article by CNBC Personal Finance Reporter Lorie Konish, who covers the results of a Center for Retirement Research at Boston College study analyzing how media headlines shape thinking on retirement planning. The research involved more than 3000 participants divided into groups, each of which reviewed news headlines covering last year’s Social Security Trustees report. The participants were either currently in the workforce or were qualified for benefits, and were asked how the headlines would alter their perceptions of Social Security’s future. Ms. Konish provides a recap of how the groups’ reacted to the headlines. You can read her full article here…

And while we’re on the subject, 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 previously by the late 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.

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