Is Retirement Becoming a Luxury for the Wealthy?
Retirement is quickly becoming a reality only for the wealthy. According to an article in Deseret News, this is not just a U.S. problem but one that’s facing countries around the world. Bloomberg went so far as to call this the “slowest moving financial crisis of our time.”
To help solve the problem, many countries are considering raising their retirement age. In the U.S. that has steadily been increasing to age 67, and retirees can collect the highest Social Security income if they wait until age 70. But there is grave concern the government will not be able to provide the promised benefits. If nothing changes, the Social Security trust fund will reach a deficit by 2034, at which time it will only be able to pay about 80 percent of scheduled payments.
Social Security was never supposed to be the sole income for seniors after they stop working. It is just one leg of a three-prong system, which also relies on personal savings. The problem is that many workers do not have access to 401(k)s and other retirement plans.
Last year, Congress proposed the Retirement Savings Act for Americans. It would provide financial savings options for the 40 million Americans who do not have access to an employer-sponsored retirement plan.
Shore Up Social Security
That’s great, but we believe the government also needs to do more to ensure that everyone is able to collect the full Social Security benefits they are entitled to after paying their taxes year after year.
The Seniors Trust stands behind the Social Security Expansion Act. Not only would it ensure the long-term solvency of Social Security, but it would also provide seniors with bigger benefits. Under this bill, seniors would receive an extra $2,400 in benefits each year.
To fund the proposed benefits boost and maintain solvency far into the future, the Social Security Expansion Act calls for high-wage earners to pay their fair share. It would apply the Social Security payroll tax on all income above $250,000. Currently, there is a wage cap and earnings above $160,200 aren’t subject to the Social Security tax.