Social Security Insolvency and the Math Behnd It - U.S. News & World Report; AMAC
A few weeks ago, the Social Security Board of Trustees issued its annual report on the program’s financial status at the end of 2024. As expected, it wasn’t good news. It signaled the loss of another year before the program’s financial reserves are completely depleted and the promised benefits can’t be paid in full. The trustees now project that asset reserves, which have been steadily vanishing since 2021, will reach zero by 2033 or 2034, followed by an across-the-board benefit cut in the range of 24%…for everybody!
The reasons for Social Security’s insolvency problem are clear. Beneficiaries are living longer than the program is designed to accommodate, the ratio of workforce participants to beneficiaries is shrinking, and the portion of workforce earnings subject to payroll taxes has shifted over the last few decades. The conclusion in all this is, as U.S. News contributor Tim Smart sets forth in a post (click here to read) on their website, a “math problem” with a few key variables that, if not addressed, will lead to a catastrophe for America’s seniors.
Tackling the Problem
That’s the bad news, and it’s nothing new. The trustees have been sounding the alarm for decades. But there is good news…the problem can be fixed. The Association of Mature American Citizens (AMAC) has been focused on this problem for many years. It has developed a 14-point plan to address the issue of insolvency and preserve Social Security for future generations. This plan, the AMAC Social Security Guarantee, is a thoroughly researched and well-balanced proposal that examines the entire Social Security structure and recommends a series of adjustments and formula changes to realign Social Security with the 21st-century economy.
AMAC’s plan, through relatively slight program modifications, would achieve solvency without payroll tax increases, and would include changes to the age for maximizing benefits, the redistribution of cost-of-living adjustments, and modifications to the formulas for calculating payments to higher-income beneficiaries. The plan also recommends an increase in the thresholds where benefits are subject to income tax and indexing of these thresholds annually to account for inflation, along with improved survivor benefits, eliminating the reduction in benefits for those choosing to work before full retirement age, and improved savings tools for future retirees, including a savings option that builds estate value.
AMAC’s Social Security Guarantee Paves the Way
The AMAC Social Security Guarantee combines the AMAC Foundation’s extensive body of program knowledge with AMAC’s advocacy arm–AMAC Action–and its broad range of legislative contacts. This combination of forces has produced a pathway to achieving a solid future for a key ingredient in the lives of America’s 70 million seniors, a segment projected to reach about a third of the total population by the end of this century. Most importantly, the AMAC plan would guarantee solvency and pave the way for Social Security to honor the obligations to those who have earned their benefits through a lifetime of participation in the American workforce.