Trustees Report 2021 is complicated, but bottom line is clear
It’s the annual and always much anticipated health report and projection for Social Security. Well, it came out this month, and the news is predictably not especially good long term for the nation’s most important social safety net. This MarketWatch op-ed by Alicia Munnell, however, notes that Covid-19 had less of an impact than many experts feared. Social Security’s 75-year deficit did increase, and Munnell asserts Congress must act soon. The key takeaway paragraph in the op-ed is this one below. Full article here.
“Yet, the 75-year deficit increased from 3.21% to 3.54% of taxable payrolls. The biggest movers were: 1) fewer births than expected in 2020 and recognition that women will continue to delay childbearing; 2) a 1% decline in the level of potential GDP due to COVID-19 and the accompanying recession; 3) updates to projections of initial benefits; and 4) moving the valuation period ahead one year. These major changes plus a host of smaller ones produced the largest deficit since the 1983 reforms.”
The Association of Mature American Citizens (AMAC) believes Social Security must be preserved and modernized. This can be achieved with no tax increases by changing cost of living adjustments, the retirement age, and delayed credits. AMAC advocates for a bipartisan compromise, “The Social Security Guarantee Act,” taking selected portions of bills introduced by former Rep. Johnson (R-TX) and current Rep. Larson (D-CT) and merging them with the Association’s own research. One component is Social Security PLUS, a voluntary plan to allow all earners to have more income at retirement. This component is intended to appeal especially to younger workers. AMAC is resolute in its mission that Social Security be preserved and modernized and has gotten the attention of lawmakers in DC, meeting with a great many congressional offices and their staffs over the past several years. Read AMAC’s plan here.