Will Social Security Disappear? - White Coat Investor
Well, no – it will not. But there is the problem that Social Security’s annual cost is more than the income it receives from working Americans, and income taxes on SS benefits, and interest from reserves held in the Social Security Trust Funds. In other words, Social Security spends more than it takes in, and that (of course) is something to worry about. Nevertheless, Social Security will not disappear as long as there are American’s working and paying into the program, but how much each person gets could be in jeopardy!
Unfortunately, Congress has known about this pending issue for decades, but has neglected to act. And they will, likely, continue to drag their feet (as they have historically done) until they no longer can and must deal with the issue. But fortunately, there are reasonable ways to correct this problem, all of which are known to Congress, as explained in this White Coat Investor article by Dr. Tyler Scott.
As an example of the leading thoughts on reforming Social Security, the Association of Mature American Citizens (AMAC, Inc.) believes Social Security must be preserved and modernized to meet the demands of 21st-century economics. AMAC’s position is that this can be achieved without payroll tax increases via relatively slight program modifications, including cost-of-living adjustment (COLA) process changes and modifications to the formulas for calculation of payments to 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) improved survivor benefits, (4) eliminating the reduction in benefits for those choosing to work before full retirement age; and (5) improved 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 proposed solution here.