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Social Security Reform Options - American Action Forum
As the year of reckoning (2033) draws near, many are becoming concerned about the future of America’s most important retirement program – Social Security. The Trustees of the program have warned Congress for decades that Social Security faces insolvency in the mid-2030s, but Congress has essentially ignored those warnings, bringing us to the point now that insolvency is a mere 7 (or so) years away. As dire as that may seem, a solution is still possible before everyone’s SS benefit is cut when the SS Trust Fund reserves run dry, which would result in an across-the-board cut in benefits of about 20% for everyone. Not a pleasant thought, because most seniors say that Social Security represents a “major” part of their retirement income.
Finally, many media pundits and some Congressional Representatives are now focusing on the problem, but the longer Congress waits to reform the program the more difficult the solutions will be. Nevertheless, at least the issue is now being discussed in serious tones, as evidenced by this insightful article by Jordan Haring for the American Action Forum. The article offers both a description of the issues as well as the potential solutions, along with the impact of each potential reform option – a great step forward in the dialogue about Social Security. Now, we just need Congress to reach a bipartisan reform package as soon as possible. Click here to read about Social Security’s reform options.
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 calculating 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.