Lawmakers Debate Changes to the Social Security System
Lawmakers Debate Changes to the Social Security System
It seems as though we’ve been hearing about this issue for decades: By about 2035, the Social Security program will no longer bring in enough revenue (via taxes) to cover all scheduled benefits for retirees. And with the cost of living continuing to rise, we’re all feeling a bit concerned. Lawmakers continue to debate various plans to restructure Social Security and close gaps in the program.
Senators Angus King of Maine and Bill Cassidy of Louisiana recently introduced a plan that would raise Social Security’s retirement age from 67 to 70 and make changes to how benefits are calculated. Their plan would also establish something called a “sovereign wealth fund” to help repair the program.
If you’ve seen those headlines, you might be wondering how the plan would affect current retirees. The senators have offered reassurance that current benefits would not be negatively impacted, and that the changes would only take place at some point set in the future.
On the other hand, the Center for Retirement Research at Boston College opposes the plan. They say that the higher retirement age would mean that Americans who need to retire earlier could be left without enough income to survive. Their estimates are based partly on the fact that about half of us have no other retirement income.
Other plans circulating in DC include one proposed by Senators Elizabeth Warren and Bernie Sanders, which would raise income and capital gains taxes to raise more funds for Social Security.
The debate around Social Security has continued for some time, and we don’t expect a resolution shortly. But we will continue to keep you informed on any developments. For now, remember that the program was never intended to serve as more than a supplement to retirement income that you establish yourself.
Let’s meet soon to estimate your income needs in retirement and review your plans. With enough attention to your own retirement planning, any changes to Social Security will hopefully not drastically impact your future.