Social Security Uncertainty Weighing on the Minds of Seniors - Fox13; Yahoo!Finance; AMAC
Two recent media posts have cited a growing level of concern among Americans in retirement or approaching Social Security eligibility. First, a post by Fox13 Salt Lake City’s Kelly Chapman (click here) suggests that “policy changes and uncertainty about the future of the social safety net” are contributing factors to the rapid rise in new benefit claims. Another post (click here), this by Yahoo!Finance reporter Gabrielle Olya, explores the concerns that benefit cuts may still be in play as the tax bill winds its way through congressional channels.
In the Chapman post, investment advisor April Reed offers conjecture that “People are really starting to worry about how long social security is gonna exist, …,” a concern that can lead to filing early and accepting a lower monthly benefit. Depending on longevity, of course, this could have significant financial implications later. The Olya post echoes this sentiment, noting “The fact that so many current (Social Security) recipients are concerned speaks to fragile household finances after years of high inflation and, more recently, a decline in the stock market.”
These two posts are indicative of the underlying concern faced by many Americans — those in their retirement years, as well as those planning for that life stage. Aside from the current anxiety associated with the tax bill, Social Security’s steadily eroding financial situation has many fearful of reaching the point of complete trust fund reserve depletion and a substantial benefit cut, a point now projected to be reached in about eight years.
So, what’s the answer to these concerns about the future of Social Security? There are solutions, with many recommendations having been submitted to Congress for actuarial evaluation over the past few decades, yet no progress has been made toward a remedy. 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 through relatively slight program modifications, including changes to the cost-of-living adjustment (COLA) process 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) indexing of these thresholds annually to account for inflation; (3) improved survivor benefits, (4) eliminating the reduction in benefits for those choosing to work before full retirement age; and (5) improved savings tools for future retirees, including a savings account that builds estate value. AMAC is resolute in its mission to preserve Social Security for current and future generations and has garnered the attention of lawmakers in D.C., meeting with numerous congressional offices and staff over the past decade. To learn more about AMAC’s plans, click here.