Washington, DC - For the first time in 36 years, according to the trustees of Social Security and Medicare, they will have to dip into the Trust Fund to meet its obligations.
“Perhaps lawmakers will now take the action necessary, in a timely fashion, to ensure the viability of the retirement and health care programs American workers invest in each payday. In fact, AMAC has been working with our representatives in Washington urging them to do just that,” says Dan Weber, president of the Association of Mature American Citizens.
Weber is hopeful that a Social Security Guarantee Act will be introduced in the House of Representatives soon. Such a law would deal with the long-term solvency of the Social Security Trust Fund in several ways. It would set back the retirement age for new retirees and change the level of payments for future retirees starting in 2022.
The Trustees believe that unless something is done about the issue of solvency, Social Security benefits would have to be reduced starting in 2034. “As the population ages at a rapid pace – 10,000 of us turn 65 each and every year – retirement is likely to become a pipe dream for many of today’s workers. We need to make sure that the funding will be there for them when they need it. But we must do more,” says Weber.
He is strongly committed to an overhaul of the law that would also focus on Cost-of-Living Adjustments (COLA), such issues as the Windfall Elimination Provision (WEP), the Retirement Earnings Test penalty and the double taxation of benefits and what AMAC calls Social Security PLUS.
The association describes the Social Security Plus provision as a voluntary early retirement account—a way for those paying into Social Security to have some control of how their money is invested. That would be accomplished by allowing workers to make contributions into Plus accounts. To avoid risky investments,
half of the money deposited in their accounts would have to be invested in guaranteed interest products such as government bonds or annuity contracts. Workers would be free to invest their balances in any other investment that meets certain suitability standards.
“The Guarantee Act needs to address the special needs of poorer Social Security beneficiaries. We’ve proposed that beneficiaries earning a household income of $20,000 or less receive an automatic annual COLA increase of three to four percent. Recipients with incomes ranging from $20,000 to $50,000 would receive an increase of 1.5% to 3% maximum. And, those earning $50,001 or more would collect increases of 1% to 2%.”
Soon after President Trump was elected, Weber met with his transition team to discuss a variety of issues of concern to America’s seniors including Social Security. “We found that the administration was in sync with our concerns and the importance of a Social Security Guarantee for this generation and for future generations. Social Security is not an entitlement handout, as many would suggest; it’s an annuity workers pay for all their working lives, a retirement fund that is supposed to be backed by the full faith and credit of the United States. But the government now says it may not have enough money to sustain the program and that benefits may be cut in the future and that’s unacceptable.”