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The AMAC Social Security Guarantee

Social Security Guarantee - Dan Weber

AMAC’s Founder, Dan Weber

Save Social Security Now

The AMAC Social Security Guarantee

Visit SocialSecurityReport.org 

“We need to Save Social Security, and we need to save it now”
Dan Weber, AMAC President and Founder

Social Security Guarantee Booklet

Read the Press Release

We are in trouble!

In 2010 the Social Security Administration paid out 49 billion dollars more than it took in. If this rate of deficit continues, benefits will be cut by 25% for the next generation, and by 2036 Social Security will be 6 trillion dollars in debt. The numbers are staggering and the outlook for future generations is bleak.  If we hope to keep the Social Security program solvent for the next 75 years the problem must be addressed now. AMAC’s founder, Daniel Weber, has proposed a simple solution for rescuing our Social Security system that is gaining bi-partisan support and has a real chance of success if we all come together in this effort. This simple solution combines earlier proposals from several Senators with the addition of an optional IRA.

The AMAC Social Security Guarantee

AMAC’s proposal has two Prime Directives. First; to maintain the same or increased benefits for those with lower earnings. Secondly, to provide a means for all earners to have more income available at retirement. We believe this proposal succeeds in achieving both of those directives, while restoring solvency to the Trust Fund.

The Prototype Plan – Keep basic Social Security, guarantee Cost of  Living increases each year.

1. IMPLEMENT A TIERED APPROACH TO THE CALCULATIONS OF COST OF LIVING ADJUSTMENTS (COLA) AS FOLLOWS:

  • a. For Beneficiaries with a household income (AGI) level less than $20,000, set an annual COLA range of 3% minimum – 4% maximum.
  • b. For Beneficiaries with a household income (AGI) between $20,000 and $50,000 set an annual COLA range of 1.5% minimum – 3% maximum.
  • c. For Beneficiaries with a household income (AGI) of $50,001 or higher, set an annual COLA range of 1% minimum and 2% maximum.

Note: in 2009 and 2010 there was no Social Security increase even though gas and food prices rose. Under this plan, all retirees will always have an increase each year.

2.   IMPLEMENT A SETBACK IN THE RETIREMENT AGE FOR NEW RETIREES,

  • a.   Starting in 2016, phase in a change in the earliest retirement age (EEA) by adding three months each year so that by 2023 the EEA would be age 64,  instead of the present age 62.
  • b.  Starting in 2017, phase in a change in the normal retirement age (NRA) by adding three months each year so that by 2024 the NRA would be age 69, instead of the present age 66-67 depending on birth year.

3.  CHANGE THE LEVEL OF PAYMENTS FOR FUTURE RETIREES STARTING IN 2019
Adjust the Primary Insurance Amount (PIA) keeping lower income earners benefits the same and lowering benefits for higher income earners.

AMAC has examined the many proposed solutions presented in the intermediate assumptions portion of the 2012 Trustees Report and selected the alternative we feel provides the best solution, when combined with our other recommendation, to achieving long term solvency. 

B1.4 Progressive price indexing (50th percentile) of PIA formula factors beginning with individuals  OASDI benefits in 2019: Create a new bend point at the 50th percentile of the AIME distribution of newly retired workers. Maintain current-law benefits for earners at the 50th percentile and below. Reduce the 32 and 15 percent formula factors above the 50th percentile such that the initial benefit for a worker with AIME equal to the taxable maximum grows by inflation rather than the growth in the SSA average wage index.
Proposed by the Social Security Advisory Board

Source: 2012 Trustees Report

The AMAC Social Security Guarantee prototype plan combines the three provisions shown above and it includes the addition of a new benefit that we feel Social Security must include if it is to help and encourage workers to attain a secure retirement.

Early Retirement Account added as a companion voluntary benefit

  • A new Retirement Account that allows workers to retire at age 62, prior to receiving Social Security.
  • Provides additional funds for retirement for all workers

Why a new Early Retirement Account? The average person receiving retirement benefits collects slightly more than $14,000 per year. The majority of retired workers rely on Social Security as the largest portion of their retirement income. For many Americans, Social Security is their only source of income. There is an urgent need to help workers save more for retirement.

The Early Retirement Account (ERA)

  • Voluntary ERA for both employee and employer
  • Tax deduction for employee and employer
  • Paid via payroll deduction, employer provides the contribution slot to employee
  • After the ERA becomes available, employer must offer to all employees (full and part time)
  • When new employees are hired, they must opt out of the ERA or they will be enrolled at $10/week
  • The weekly minimum is $5, the weekly maximum is $100 or $5,200/year
  • Employer may elect to contribute to employees’ Early Retirement Account in any amount or percentage of pay they choose up to $50 per week ($2,600 per year)
  • The employer may start or stop their contribution at any time

The individual is the owner of the Early Retirement Account

  • Portable; if wage earner changes jobs, the new employer must add payroll access for ERA
  • Only available to wage earner at age 62 or because of death or total disability
  • Wage earner may elect to start receiving payouts at any age between 62 and 70 ½
  • Death benefit is the accrued value of account at time of death
  • Benefit and Early Retirement Account earnings are tax deferred
  • Contribution is indexed for inflation ( $5 week raised to $5.15 week if 3% inflation, etc.)

Investment options for the Early Retirement Account

  • 50% of the funds must be invested in guaranteed interest accounts or annuities
  • The other 50% may be invested in any approved investment (i.e. S & P 500 index)
  • A volunteer board of investment experts creates lists of approved investments to assure quality
  • Investment choices would be similar to those used in 401k plans and IRAs and the cost of administration would be borne by the same providers who offer those plans, not the federal government

A 25 year old wage earner contributing only $15 per week, using the above assumptions, would have accumulated $165,407 by age 62.

A 25 year old wage earner contributing $45 per week, with the same assumptions, would have accumulated $352,389 by age 62.

* Historical average returns

How the AMAC plan achieves solvency

The projected shortfalls in the Trust Fund are shown in the Trustees annual report.

There are two actuarial projections used; the Long-range balance and the Annual balance in the 75th year from the report.

Both balances are in the negative, the Long- range balance is expected to be -2.67 and the 75th year balance is projected at -4.5.

The AMAC proposal combines three different changes, each improves both of the actuarial balances and the total effect could achieve the goal of showing positive balances.

It must be understood that because of the interaction of the changes on each other, AMAC cannot predict, for certain, that the total results will cover the entire shortfalls.

The office of the Chief Actuary will be asked to conduct the rigorous and detailed analysis required to determine if a true surplus in the Trust fund will likely occur.

The following outlines the potential improvements in the actuarial balances that could possibly result from the three changes.

For additional information contact:

[email protected]

Association of Mature American Citizens, AMAC.

Dan Weber
President, AMAC 312 Teague Trail, Lady Lake, FL, 32159 | 888-262-2006

Connor Martin
Legislation, The Charles Group, 322 Massachusetts Ave. NE Washington, DC 20002
202-546-4467 | [email protected]

The Social Security Report – Powered by AMAC

www.SocialSecurityReport.org

AMAC’s Social Security Report website is designed to serve as a resource for anyone interested in the state of our Social Security program. By providing daily updates on major, breaking news and legislative developments affecting Social Security, by reprinting quotes and comments that reflect the insights of key political figures involved in shaping Social Security policy, and by maintaining an on-going  catalog of questions and answers relevant to topics of interest to the public, AMAC seeks to keep all Americans up-to-date on the Social Security landscape.

The site is presently sponsored by AMAC, but shortly the AMAC Foundation will become the owner of the site and be responsible for its administration.

Our objective with this site is to provide a “go to” place for Congressional Aides and their Senators and Representatives, along with the general public, to keep abreast of Social Security’s ever-changing topography.  We invite feedback and commentary from informed parties as part of our quest for open dialog on one of the nation’s most critical programs for the elderly.

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Comments (470)

  1. David Bodine says:

    Like it or not, some kind of means-testing will arrive eventually. We can see the seeds already. Talk of limits on how much you can have in your IRA, talk of “income inequality”, talk of “wealth taxes”. The left has a program they are willing to be patient with, plant the seeds now, and even if the right wins control of the machinery of government in the coming elections, history suggests these ideas eventually come to fruition.

    Both sides collaborated in the unsupportable expansion of SS and Medicare/Medicaid….it took the governing class as a group to get us where we are. Alas, the solution will not be pretty or honest. It will be a “velvet glove fascism” as we see today with healthcare. All for our own good, as always.

  2. ThirdDerivative says:

    ‘Fix’ Social Security by eliminating the taxation cap – problem solved – no need to reduce benefits, or increase age of eligibility Since corporations and their right wing apologists have obliterated traditional pensions and replaced them with far less beneficial 401k’s there’s actually a need to increase Social Security benefits.

    • anthony says:

      We must look at the hard facts and not blame groups of people or business. The US government has put in place laws and regulations that are anti business and has forced many to move to overseas.

  3. Steve Watson says:

    Giving congress the power to count the Social Security program as money to be borrowed (Clintons surplus). Will ruin the program and it will collapse.

  4. ric davis says:

    If you turned 62 in 2009 and had money invested in the market you wouldn’t have averaged 7 percent on your investment if you were in an S&P 500 index fund (dotcom crash, 911, housing crash). Agree we should let people set up ERA’s, but to avoid having to fall back on the government if your investments go bust, they should be restricted to guaranteed returns even if it’s at a lower interest rate. Also, we need to means test not just the COLA, but also the benefits. The formula is open to debate, but individuals of a certain wealth/income level shouldn’t be getting full benefits. Also need to raise the income threshold on payroll taxes to $30,000,000 (A-Rod’s salary).

  5. Donald Lajoie says:

    I am retired from the Navy with 24 years and retired from a non profit with 15 years and I receive monthly retirement pay from both. When I sign up for SS will those two monthly payments be deducted from my Social Security check each month? both retirement checks add up to $31,500 a year.

  6. c bishop says:

    I believe this would be a good thing if it actually will be used or ERA. What some Americans don”t realize is that alot of companies and businesses DO NOT encourage employees to work until 62;much less work until 64 or 65 Many of them try and lay off or eliminate the older employees and in turn try and hire younger, cheaper labor..If these companies and businesses were to encourage this the SS program would be in better shape. Many employees 50 and over are FAR more dedicated and dependable than their young parts. Every employee who has put into the SS system for 10 years or longer is entitiled to a percentage during retirement or a disability.For anyone else to think otherwise is not being reasonable.

    • Bob in Az says:

      The first few sentences are accurate. However, the last two appear to be an emotional response. Why 10 years? That is an arbitrary number. If the argument is that the money paid in is yours then anyone who made a single payment would be entitled to benefits. SS is not a “savings plan”.. beneficiaries are not receiving their own savings back. The benefits paid to recipients are taken directly from the wages of those who are currently working. SS is literally wealth distribution.
      The SS system pays benefits to “investors” out of the money raised (wage deductions) from subsequent “investors” (those still working). That is literally the definition of a ponzi scheme. The deductions taken from your wages over your lifetime went into the general fund and were spent.. Are you entitled to receive the income tax you paid back? That is what SS was originally.. simply another source of funding for government. I would argue that income tax is inherently wrong, but that is another subject. SS’s contemporary form is a ponzi scheme / welfare program.
      What is not reasonable is that people believe they are entitled the theft of another person’s wages simply because they themselves had their wages stolen from them. If a person steals $100 from you that does not justify you stealing $100 from someone else. Your gov lied to you and promised “benefits” (other people’s wages/labor) when infact the payments you made were just another tax.

      • Bob says:

        You are 100% correct, Bob! Furthermore, shouldn’t SS be a pretax tax? Why do we pay Federal tax on SS wages? Isn’t that double taxation? I am not a big fan of this new strategy. It is still redistribution. I understand that their are some people who become mentally or physically disabled that we need to take care of but pretty much everyone else should be producing!

        How about a split on SS tax so that 1/2 goes into a personal account post tax, with many options for secure investment avoiding the wall street casino. Which is not where people should keep their “safe” money. Annuities only! Then in retirement the money comes out tax free permanently and cannot be changed to be taxed later like they did with SS. The other 1/2 goes to support the disabled. Oh and the I am talking real disablities. I see a incredible number of people who are disabled because they are obese… put down the fork!

        All mandatory!

        As you pointed out the other problem of older workers being able to keep their job has become a bit of a problem. Without implementing some sort of government oversight (yuk) I don’t have a good solution. But I do agree we need to raise the age for benefits. Well actually we need to ween off of benefits so that people build their own retirement during their working years. The ERA is on top of SS … I say split SS into ERA and SS … SS being only for those who truly were not able to produce because of disablity and ERA being the workers retirement. You get what you get!

  7. DENIS LYNCH says:

    AS A RETIRED FEDERAL EMPLOYEE, PRESIDENT REGAN DECEIDED THAT WE SHOULD NOT RECEIVE OUR FULL SOCIAL SECURITY. HE WAS A HEALTHY AND WEALTHY MAN, I AM NOT. MY SS IS $142 MONTHLY,
    (246 MINUS 104 MEDICARE ). I AM ON 13 PRESCRIBED MEDS, AND SEVERAL MEDICARE PAYS $0 IN SPITE
    OF MY PART D COVERAGE.
    BEFORE I JOIN YOU GROUP, CAN YOU OFFER ME ANY HELP TO RECEIVED THE SS I SIGNED ON FOR IN 1969

    DENIS LYNCH

  8. Bob in Az says:

    We should keep in mind that SSI was never meant to be collected by everyone. When it was instituted the age to collect the first benefit payment was 4 years past the average lifespan… That means that today the age to collect the FIRST benefit payment would be 83. It was meant for those who outlived their retirement savings.

    Also the misconception that the federal government has a “lockbox” with your individual name on it is simply not true. The SSA deductions from one’s paycheck into the general fund. There was never “an interest bearing savings account”. The deductions go into the general fund and the treasury dept gives the SSA an Open Ended Treasury note with NO Maturity Date that does not collect monthly or even annual interest. The interest is supposed to be paid when the note is redeemed by SSA from the Treasury. A jaded individual would say that SSA was created as an income tax masquerading as a federal pension, albeit a pension plan in which everyone pays into but only those who live 4yrs past the average lifespan would ever collect on.

    I understand many people paid into it & believe they are entitled to the benefits. However, It was just another income tax / source of revenue for the federal gov. The American people were lied to. Keep in mind it’s not “your savings”, nor was it ever, that is the source of funds for the SSI checks… it is taxes levied on those still working.

    Originally SSA was an income tax sold to the American people as a pension plan for those who outlive their savings. Today it is simply another welfare program funded by those who are still working. As the SSA benefits increase so will the taxation burden levied on your children & grandchildren.

    • Steve Watson says:

      I agree with the comments I see here but there is one fundemental change that MUST e made or nothing will keep the Social Security Program from collapsing. The congress must be forced to STOP spending money like drunken sailors (my apologies to drunken sailors), As long as congress insists on spending the money that goes into Social Security we cannot fix it.

  9. Lisa Hatch says:

    The concepts as a whole I agree with; taking care of the poor, use of ERA, 64 as minimum age, and increasing to 69 as regular retirement. The only part I struggle with is that hard labor jobs tend to wear out a persons body… that’s probably a Disability issue…

    I believe I also understood that there would be levels of pay out by category instead actual wage index – is this correct – if so everyone should pay in by category. Maybe it should be just a flat amount per household – with everyone putting the same amount into SS – including those on Welfare and Disability programs.

    I know you are saying but then the Federal Gov is paying into our SS… Why not – maybe that would encourage those programs to be reformed so on those that truly need these services are using them that it not being taken by illegal immigrants… Our businesses pay into employees retirement accounts, they are the source of all funds going into Medicare, and SS.

  10. John Rogers says:

    SS is a mess because we let it get like that. Our elected officials only react when we put the heat on them.
    SS funds should be paid into a lock box with congress not able to spend the funds as they are now.
    Support only those candidates who have a “hands off SS funds” thought process.
    Make your elected officials feel the heat. Get out a letter and write them now as I am, right now.
    I am writing all of my elected officials. Write yours. A short, to the point letter works.

    Let us turn up the heat on these elected officials NOW !

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