Social Security: It’s Here to Stay
It may be somewhat of a “good news – bad news” situation, but make no mistake – Social Security isn’t going bankrupt and will be here for you in your golden years. So what is the bad news? Well, for some time now Social Security income, mainly from American workers, has been insufficient to cover expenses, and the shortfall has been covered by taking money from Social Security’s reserved assets sitting in the Trust Fund. The real bad news is that, unless Congress does something to reform how the program works, the monies in the Trust Fund will be fully depleted around 2034, resulting in an across-the-board 23% reduction in everyone’s benefit. Make no mistake – Congress is acutely aware that something must be done soon, but they seem unable to muster the bipartisan spirit necessary to arrive at a solution. It’s likely they will eventually reform the program (after all possible political gain can be extracted from the issue), but the longer they wait the more painful the solution will be. This Motley Fool article by Katie Brockman explains.
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. This can be achieved without tax increases by slight modifications to cost of living adjustments and payments to high income beneficiaries plus gradually increasing the full (but not early) retirement age. AMAC Action, AMAC’s advocacy arm, supports an increase in the threshold where benefits are taxed and then indexing for inflation, and calls for eliminating the reduction in people’s benefits for those choosing to work before full retirement age. 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.