Home Meet Bill Issues Join Us Contribute
Social Security - AARP Article
Link to original article:
Where AARP Stands
Our Fight: Keeping Social Security Strong
The longer we wait to strengthen the system, the more painful the changes will be.
For 75 years, Americans have been paying into
Social Security so they can collect on their contributions when
they're ready to retire. But because Americans are living longer and
the number of retirees per worker is increasing,
Social Security is projecting a long-term shortfall. To ensure that
Social Security will always be able to pay adequate benefits, Congress
needs to make some small adjustments to the program.
Social Security is in no immediate danger of
"going broke." With the retirement of the boomers on the horizon, the
Social Security Administration began building a cushion to help see this
generation through its retirement years. Thanks to that planning, the
Social Security Trust Funds hold more than $2.4 trillion in U.S.
Treasury bonds, which earn interest every year. Without any changes,
Social Security will be able to pay 100 percent of benefits until 2037
and more than 70 percent of promised benefits after that. Only paying 70
percent of promised benefits, however, is not acceptable.
The country can take some simple steps now to
begin making a down payment on the future Social Security shortfall.
For example, AARP supports the following change:
Some people have recommended taking some of the
money people pay into the system and diverting it into private accounts.
Because less money would then be flowing into Social Security, the
guaranteed and inflation-adjusted lifetime benefits would be put at
great risk for cuts. Any new private account would be subject to the
risks of the market.
Many people do not realize how valuable Social
Security is to them. On average, an individual would have to save an
additional $225,000 while working to replace the benefits
Social Security provides in retirement. Independent investments,
pensions, IRAs and 401(k) accounts are all important parts of retirement
savings, but Social Security is the guaranteed base of retirement
security for most Americans. In fact, couples on average can expect
about $22,000 per year in Social Security benefits.