Who’s Really Paying for Your Social Security Benefits?
A simple question such as “where do my monthly benefit checks come from” is generally not well not understood by most Americans, as a typical reply might be this– “it’s my money; I paid in; I’m getting it back.” Wrong! Dan Caplinger dives into some detail here about exactly who’s paying for your Social Security benefits. Of course there is no safety deposit box with anyone’s name on it in Washington D.C. So how are checks paid? In short, there are three sources of income for Social Security– Social Security payroll taxes (6.2% each on workers and employers up to $137,700), interest on trust fund balances, and income taxes on Social Security benefits. The latter is not paid by all, mainly only by middle and upper income beneficiaries, though with the amount not indexed for inflation, more people pay income tax each year. Read Caplinger’s full article here.
The Association of Mature American Citizens (AMAC) believes Social Security must be preserved and modernized. This can be achieved by making modest changes in cost of living adjustments and the retirement age, with no additional taxes on workers. 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 well researched ideas. One component is Social Security PLUS, a new, voluntary plan that would allow all earners to have more income available 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.