Social Security headed for “life support?”
“Life support” is not all that far-fetched a reality for the program that 63 million people rely on for a monthly benefit. Social Security is bumping up against issues that have been known for decades– namely, unfavorable demographics. People are living longer– much longer. Families are having fewer children. Social Security’s asset reserves, commonly called surpluses, will be sufficient to allow full benefits to be paid only through 2034. After that, in the absence of congressional action, everyone’s benefits would be slashed 21% across the board, without any vote in Congress. Benefits can only be paid commensurate with income derived from workers, interest, and income tax on benefits. Sean Williams of The Motley Fool explains the current and future state of Social Security, including reform proposals to shore up the program. He notes the program will never be bankrupt as long as workers contribute payroll taxes, but the time to enact reform to ensure its longevity is now, not when the crisis actually hots in just over a decade. Read his full piece here.
The Association of Mature American Citizens (AMAC) has a reform plan that makes modest changes in cost of living adjustments and the retirement age, without additional tax increases 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.
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