Social Security is six years from insolvency - Fortune
We keep hearing that the phrase “Social Security Trust Fund insolvency” will happen soon. But most of us tune out the actual timeline of when it will happen. Social Security has six years left, according to the new report from the Penn Wharton Budget Model (PWBM) released on March 19th. The first instinct of politicians is to raise taxes to solve the problem; however, according to the PWBM researchers, this may be precisely the wrong move. Nick Lichtenberg, writing for Fortune, explains how the most instinctive move of raising taxes would be the most counterintuitive solution to the insolvency issue. Read Mr. Lictenberg’s article here…
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For its part, the Association of Mature American Citizens (AMAC) has been at the forefront trying to strengthen Social Security by developing and proposing its Social Security Guarantee which restores the program to solvency without raising payroll taxes. AMAC believes Social Security must be preserved and modernized to serve future generations. AMAC’s position is that this can be achieved without payroll tax increases through relatively minor program modifications, including changes to the cost-of-living adjustment (COLA) process and modifications to the formulas for calculating initial benefits for 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) indexing of these thresholds annually to account for inflation; (3) changing the taxable maximum formula to address the unintended loss of revenue; (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. More recently, AMAC has met with the Commissioner of Social Security to discuss Social Security reform. See AMAC’s proposal for Social Security reform here.
Let the top 4 investment companies come to one to save Social Security through smart investment ideas, IT CAN BE DONE / LET ELON MUSK IN WITH HIS INPUTS ..
Robert:
Thank you for your comments! As you’re probably aware, the question of investing Social Security revenues in market-based financial vehicles is one that surfaces repeatedly, and perhaps even more frequently as the point of insolvency approaches. In the past, as you also probably know, risk-adverse voices (congressional and public) ruled the day, citing the risk to guaranteed retirement benefits via market volatility. This is an argument that will undoubtedly resurface when Congress gets serious about Social Security solvency, and it’s reasonable to expect that the issue will be looked at differently this time around.
AMAC, in its Social Security Guarantee (see http://www.AMAC.US/social-security-guarantee) approaches the matter from a different perspective. The SSG advocates, for workers far removed from Social Security eligibility, enhanced options to build wealth for retirement and to have these options overseen by non-governmental sources. Specifically, SSG recommends optional savings vehicles governed as follows:
• 80% of the funds would be invested in stock funds
• The other 20% may be invested in any approved conservative investment (i.e. S & P 500
index)
• To ensure quality, a volunteer board of investment experts would create and maintain lists
of approved investments
• Investment choices would be similar to those used in 401k plans and IRAs and the cost of
administration would be borne by the same providers who offer those plans, not the federal
government
AMAC’s plan, of course is just one of many that will need to be on the table to resolve this problem, but we believe it has the potential to resolve the $25 trillion shortfall while preserving the program for generations to come.
Thanks again for your comments!
Gerry Hafer, Social Security Advisor
AMAC Foundation, Inc.
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