📋 AARP Ends Social Security Anniversary With Town Hall (AARP Article & Video/advocacy)

A TWO PART POST since it is long but important, I think.

I think everybody pretty much agrees on why Social Security is so important and that we have paid into it for a return.  

We haven’t really ever been told how much we can get as a return - the formula depends on the current law.  

So we get a benefit - GREAT.  Now how much should that benefit be?  Right now those that have paid in less based on their earnings actually get more based on the formula - meaning a higher % of their average salary is replaced by their SS benefit than those who have paid in more - that’s the way the program works now.

Now how should the program be fixed to last for the long term?  That’s where the rubber meets the road, so to speak and where the real brouhaha begins.  The Trust Fund needs money - money can come in (2) different ways or a bit of each.

a reduction in benefits  or an increase in revenues.  Then there are different ways to achieve either of those methods - a reduction in benefits or an increase in revenues or a bit of both.

Those that are getting benefits now or are very close to it have a date when this needs to be resolved or our benefits are gonna be reduced - that the law.  When the  Trust Fund reaches a point of  insolvency then only a portion of the benefit owed to all beneficiaries can be paid.’

Insolvency means that the trust fund is unable to pay benefits in full and on time. It does not mean that Social Security will be completely eliminated and unable to pay any benefits.” But future benefits could only be paid from taxes collected, which would cover roughly 80% of benefits. While beneficiaries would still be legally entitled to their full scheduled benefits, the federal Anti-deficiency Act prohibits government spending in excess of available funds. Since current contributions wouldn't meet the full obligations, recipients might receive timely but reduced payments or be paid in full but on a delayed schedule.

Since 2021, we have been paying benefits at the 100% rate but yet yearly income or revenues coming into the Trust Funds have NOT been enough to cover the payments to beneficiaries - Thus each year, we are drawing down the reserve funds that we have built up until now.  This reduction in Trust Fund reserves also reduces the amount that we are getting in interest paid by the government on these special treasuries.  

We all have a stake in this - ALL current beneficiaries, All those who are close to drawing a benefit, ALL those who are still working and paying into the Social Security system, even those who are just now starting their working careers.  

So we need to get past discussing the problem over and over - that seems to be the easiest thing to do.  We need to get past the discussion of people wanting more.  We need to get past the discussion of who deserves it.  We need to get past the discussion of who will pay for the fix to the system - cause we all have a part in the outcome.  

Since Employers are also part of this discussion, since they pay a matched contribution, we will need to also look at whatever changes are made and how it affects their bottom line and our economy as a whole.  The Social Security Trustees call this the “societal influence”  meaning that employer will look at how much they have to spend on employees and structure their payrolls accordingly.  That may mean less employment or restructuring their business for less employees and more consultant types who are paid as self-employed individuals.  Or figuring out how to legally pay for a job but in something other than wages, i.e. stock options.

We are all gonna see whatever we do in a light that is our own.  Those that get a smaller benefit for whatever reason will see things in their own way.  Those that get a larger benefit for whatever reason will also see things in their own way.  Those that are close to drawing their benefits will be in whichever camp.  Those who are still working, or have just began their careers and have years to go before even thinking about getting a benefit will see things in a completely different light.   

Next Part 2