As you may have gleaned from years of headlines on the topic, the Social Security program faces a number of problems in the future. One of those is the fact that by about 2035, the program won’t bring in enough revenue (from taxes) to pay all currently scheduled benefits. And as we all know, the cost of living can already be tough on retirees. Two senators have proposed a plan to address these problems.
Senators Angus King of Maine and Bill Cassidy of Louisiana championed a plan to change Social Security’s minimum retirement age to 70 (up from the current 67) and to establish a “sovereign wealth fund” that would shore up the program. Their proposal, if passed, would also change the way that Social Security calculates benefits.
Although the changes sound significant, the senators have assured constituents that their plan would not include cuts for any American currently receiving benefits. In fact, according to the way their plan calculates benefit checks, some would actually receive more money, according to an email released jointly by the two lawmakers.
However, the Center for Retirement Research at Boston college opposes the plan, mostly based on the higher retirement age. While the plan would not affect anyone currently receiving benefits, it could mean that many Americans who need to retire before age 70 would be left without enough income to make ends meet. That’s because roughly half of us have no other retirement income at all.
The proposal is not the only one circulating in DC at the moment. A plan proposed by Senators Bernie Sanders and Elizabeth Warren would infuse more money into the program by raising income and capital gains taxes.
As lawmakers continue to debate the merits of various programs, we will keep our readers informed of any new developments. In the meantime, do remember that Social Security was not intended to fully fund your retirement, and we must meet regularly to establish a solid retirement income plan. No one ever complained about preparing for retirement too well! But in the event that any new changes to the law impact you, you will be glad for your preparation.