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The “Promise Act” and Social Security’s Full Retirement Age - AOL.com
For a long time, there has been a debate among pundits and within political parties about raising Social Security’s full retirement age (FRA), which is the age at which 100% of earned benefits are paid. Generally speaking, those on the left tend to oppose any FRA changes, while those on the right see it as a common sense action because life expectancy has greatly increased over the years. And, of course, the debate will continue. But is raising the full retirement age really a truly important factor for solvency of the Social Security program?
Well, the answer to that is yes, but it is far from being a foregone conclusion in any active Congressional legislation. The so-called “Promise Act” (S.4979) is a bipartisan proposal to create a Congressional process to assure the long term fiscal stability of the Social Security Trust Funds (called the OASDI funds), thus restoring the Social Security program to solid financial footing. After all, the Social Security OASDI Trust Fund is heading for full depletion in the fall of 2032. And if Congress doesn’t reform SS soon, that will result in a 22% cut of everyone’s Social Security benefit.
Changes to the SS full retirement age may or may not be a part of any program change, but it is definitely something that should be considered, along with other alterations. And that’s what the Promise Act suggests – creating a Congressional process to recommend bipartisan program changes to “save” Social Security from insolvency, as described in this AOL.com article by Josh Koebert.
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.