Social Security – a record income in 2018
With all the gloom surrounding Social Security’s long term fiscal health, one fact rises above that. The income the program generated in 2018 surpassed $1 trillion for the first time ever. The program had been forecast to run a deficit. That has been pushed to 2020 due to a strong economy. Social Security’s main source of income is payroll taxes, split between employee and employer at 6.2% each on wages up to $132,900. It also generates interest income and a third source is something author Sean Williams calls a “necessary evil.” That is taxing some higher earners’ benefits. It may be unpopular, but it is likely necessary, as the long term picture is still bleak. A deficit is predicted in 2020 and every year thereafter. The past surpluses that will allow the program to pay full benefits until 2034 will be exhausted that year, triggering automatic across-the-board cuts for all. Read full piece by Williams in the Motley Fool here.
The Association of Mature American Citizens (AMAC) believes Social Security must be preserved and modernized. This can be achieved by making modest changes in cost of living adjustments and the retirement age, with no additional taxes on workers. AMAC advocates for a bipartisan compromise, “The Social Security Guarantee Act,” taking selected portions of bills introduced by former Rep. Johnson (R-TX) and Rep. Larson (D-CT) and merging them with the Association’s own well researched ideas. One component is Social Security PLUS, a new yet voluntary early retirement plan that would allow all earners to have more income available 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 legislative staffs over the past several years. Read AMAC’s plan here.