The Social Security Trust Fund, and how it earns interest
The Social Security Trust Fund, with over $2.8 trillion dollars in assets, would seem to be quite healthy at first glance. But when you realize that due to increased longevity and a smaller ratio of workers to retirees it will be exhausted by about 2034, the amount of interest earned by the fund becomes an important factor. While it’s critical that the Fund’s monies be invested in super-safe bonds, those bonds yield characteristically low interest rates which only contribute about $90+ billion annually back to the Fund. And, starting in 2020, as the Trust Fund balance gets smaller (unless Congress acts soon), so will the amount of earned interest the fund generates. All of which just adds to the crisis faced by seniors when the Trust Funds balance reaches zero in 2034. This article by Motley Fool’s Sean Williams laments the Trust Funds low earned interest rates and discusses how the Federal Reserve’s monetary policy affects them.
AMAC has been at the forefront trying to strengthen Social Security by developing and proposing its Social Security Guarantee. AMAC has been discussing and continues to discuss this common-sense solution with Congressional Representatives in its efforts to protect America’s senior citizens who rely on Social Security. To review AMAC’s Social Security Guarantee, click here.