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What will be the "Cost of Insolvency" for Social Security
It’s no surprise to most people these days - Social Security is facing a pretty dire outlook in just a few years. According to the Trustees of the program, all the reserved funds now held by the Social Security Trust Funds (about $2.5 trillion at end of 2025) will be gone in 2032. Unless Congress take action to reform the program soon, that will mean a cut of about 23% in everyone’s monthly Social Security payment. And that would be catastrophic for most Americans who rely heavily on their monthly Social Security to survive!
A solution is possible, but Congress needs to act soon to avoid this national financial disaster, as discussed in this National Review article by Rachel Greszler.
The article talks about using an undefined “Universal benefit” approach rather than the current “progressive” approach to benefits. But despite that lack of definition, the message about Social Security insolvency is clear - Congress must act soon to reform the program!
While some other organizations only verbally lament this looming crisis, The Association of Mature American Citizens (AMAC) is actively engaged in providing Congress with ideas for a long-term solution. As an example of leading thinking on reforming Social Security, AMAC 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.
This posting is presented for informational purposes only and does not represent legal or financial guidance. Any opinions or interpretations presented are either those of the original author or, in the case of articles authored by the AMAC Foundation, are the opinions of AMAC Foundation staff, originally trained and accredited by the National Social Security Association (NSSA) and certified via the AMAC Foundation. Any links included in the article are valid on the posted date; socialsecurityreport.org cannot guarantee the duration of the links’ validity. NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website (https://amacfoundation.org/services/) or email us at ssadvisor@amacfoundation.org. Because we are a non-profit organization, there is no charge for these services.