Social Security Insolvency – Coming up fast! - ABC News
The clock is ticking, with Social Security’s reserved funds expected to be depleted as early as the year 2032! And that would be a crisis for most American seniors (and others) who rely on Social Security for much of their retirement income. Benefits could be cut by about 23% for everyone if the reserves are gone. Problem is, Congress has been kicking this can down the road for decades because they knew that SS reserves would be gone in the early 2030s but have neglected to take any action. And that’s likely because of the potential wrath of voters who fear any type of benefit cuts to this crucial retirement program. Not surprisingly, feelings about how to reform the program vary depending on age, with younger generations and older seniors disagreeing on how to fix the problem. But fixing the problem by reforming Social Security is not only needed, but mandatory to avoid automatic benefit cuts. And the one thing the generations do agree on is that action must be taken soon, as explained in this ABC News piece by Cory Smith.
As an example of the leading thoughts on reforming Social Security, the Association of Mature American Citizens (AMAC, Inc.) believes Social Security must be preserved and modernized to meet the demands of 21st-century economics. AMAC’s position is that this can be achieved without payroll tax increases via relatively slight program modifications, including cost-of-living adjustment (COLA) process changes and modifications to the formulas for calculation of payments to higher-income beneficiaries. Changes to the age for maximizing benefits are included in AMAC’s position, along with (1) an increase in the thresholds where benefits are subject to income tax; (2) changing the taxable maximum formula to address the “income dispersion” issue; (3) indexing of these thresholds annually to account for inflation; (4) improving survivor benefits, (5) eliminating the reduction in benefits for those choosing to work before full retirement age; and (6) improving savings tools for future retirees, including a savings account that builds estate value. AMAC is resolute in its mission that Social Security be preserved for current and successive generations and has gotten the attention of lawmakers in D.C., meeting with many congressional offices and staff over the past decade. See AMAC’s proposal for Social Security reform here.