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Some Sacrifice needed to save Social Security - MarketWatch
As most Americans know from media articles on the topic, the Social Security program is forecasted to experience financial trouble soon. The Social Security Trust Funds, which now contain over $2.7 trillion in assets, will be depleted in 2033, according to the Trustees of Social Security. And that will result in an across-the-board cut of about 23% in everyone’s SS benefit. So what is Congress doing to prevent this from happening? Well, although many proposals are being considered, no definite resolution is yet at hand.
A perhaps even bigger question is: what are Americans willing to sacrifice in order to resolve the issue? Not surprising is that most agree that Social Security is worth saving, and that feeling transcends all age groups and political parties. Many are even willing to pay more taxes to ensure benefits continue for future generations, but nearly all agree that Social Security is crucial to the retirement security of all Americans. There is more disagreement, however, on how to reform the program.
This MarketWatch article by Alessandra Malito dives deeply into the issue of Social Security solvency, revealing that there are only two ways to fix the problem – either increase Social Security income, or reduce Social Security costs. Which translates to raising taxes or reducing benefits. Or both. The article explains the problem and the various ways to fix it, emphasizing that reform will require “tweaking” of several facets of the program. Click here to read more.
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) 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 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.