The Clock is Ticking for Social Security Solvency - Motley Fool
Lest we forget, this article provides an excellent treatise about Social Security’s looming financial issues, now forecast to come to pass in about six short years. Don’t panic! That doesn’t mean that Social Security is going away (as in “bankrupt) but, rather, it may become “insolvent” and unable to pay 100% of the benefits each person is due monthly. That, of course, is still a major issue for most seniors, as current projections predict a 23% cut in monthly benefits. That is, of course, unless Congress finally stops “kicking the can down the road” and get’s serious about reforming Social Security to restore it to full solvency. This Motely Fool article by Katie Brockman takes us through the issue and the possible solutions, which will likely include tax increases and some scaling back of benefits for future beneficiaries.
As an example of leading thinking on reforming Social Security, the Association of Mature American Citizens (AMAC, Inc.) 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. See AMAC’s proposal for Social Security reform here.