The promise to guarantee Social Security for all Americans must be kept. This plan is a combination of selected assumptions taken from legislation introduced by Representative Sam Johnson (R) of Texas and Representative John Larson (D) of Connecticut to achieve what is the best path to long-term Trust Fund solvency without raising taxes. It includes recommendations from the Social Security Advisory Board and AMAC.
We believe the proposal presented here succeeds in achieving all of these directives.
Note: In 2009, 2010, and 2016, there was no Social Security COLA, and in 2017 it was only 0.3%, despite the fact that expenses most common to seniors (e.g., food, insurance, medical treatment, prescription drugs, etc.) continued to rise sharply. Under this plan, all retirees will be guaranteed an increase each year.---
The AMAC Social Security Guarantee prototype plan combines the provisions shown above, and includes the addition of a new benefit that we feel Social Security must include if it is to help and encourage workers to secure a sufficient retirement.
Fifty million Americans have no retirement plan, and the average person receiving retirement benefits collects slightly more than $16,000 per year. Accordingly, 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.
|Achieving $1,000,000+ with The Early Retirement Account|
* Historical average over last 90 years of the Standard & Poor’s 500 Index is 9.8%
A 23 year old employee contributing only $25/week in the first year and an employer contributing $15/week, with both adding 4% annually thereafter, in a mix of 80% stock funds and 20% conservative investments, would accumulate over $1 million by age 65.
It is estimated the average wage earner will accumulate between $250,000 and $500,000 at the time they claim the benefit because workers increase their contributions as they become older and as wage levels are likely to increase.
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; specifically, the Long-range actuarial balance is expected to be -2.66 and the 75th year annual balance is projected at -4.35.
The AMAC proposal incorporates the provisions discussed above. Provisions I, II, and III have been scored by the Office of the Chief Actuary. Each improves one or both of the actuarial balances so that the total effect appears to meet the goal of achieving positive balances.
It must be understood that because of the interaction of the changes on each other, 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 result from these changes.
The Charles Group, 322 Massachusetts Ave. NE Washington, DC 20002 | 202-546-4467