Social Security Cuts Are on the Table - The Motley Fool & AMAC
Anyone who tries to convince you that Social Security is just fine and thus must be left alone is not telling the truth or has no idea how bad things are. Cuts are on the table. But like any buffet, politicians do not have to partake in or indulge in what’s on that table, as in straight out cuts. Buffets allow one to take a little of this and a little of that. And so that may be what both parties finally agree to in order to stave off the automatic across the board cuts that all beneficiaries face in about nine years. Christy Bieber briefly reviews two options– raising the payroll tax and raising the earnings that are taxable. The former would require going from a combined 12.4% employee/employer payroll tax to 15.54% right now in order to stave off insolvency. Waiting until all trust funds (reserves) are depleted would require a combined rate of 16.53%. Current workers and employers would bear all of the burden. Raising the cap from the current $137,700 often polls well, but benefits are tied to earnings; thus benefits would increase as well, saving little to nothing. The law could be changed to cap benefits of course. However this would be a fundamental shift toward making Social Security resemble welfare. Review the options in Bieber’s article 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 current Rep. Larson (D-CT) and merging them with the Association’s own well researched ideas. One component is Social Security PLUS, a new, voluntary 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 staffs over the past several years. Read AMAC’s plan here.
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