Why Don’t People Wait To Claim Social Security?

March 20, 2017 by tony Leave a Comment

I recently came across this article in the “Motley Fool” that caught my eye. The article, “Why Don’t More People Wait to Claim Social Security at 66?“ seemed to have a simple answer, but it did provide some excellent insights and information into the percentages that claim early, so I was glad I read it.

The 1st unique part of the article was the number of people who actually file early. At this time, even though the “normal” retirement age is 66 almost 1/2 of people file for reduced Social Security benefits at age 62.

The reason people are willing to take a 24% hit on their Social Security earnings (that’s the penalty off of your benefits for filing early)…

keep in mind why the Social Security Administration cuts benefits for early claimers. It’s not to punish them; it’s because people who start collecting benefits early will receive benefits for a longer amount of time.

The article explains it succinctly here…

the average 62-year-old retiree can be expected to live for about 21.4 more years, while the average 66-year-old will live for 18.3 more years. In other words, the 62-year-old is expected to receive Social Security checks for more than three years longer than someone who waits until 66 to claim benefits.

There are also a few other reasons why people take Social Security early…

They need the money. How many Americans are on track for retirement? Very few…

It’s no secret that millions of Americans are underprepared for retirement. In fact, according to the Economic Policy Institute (EPI), almost half of American families have no retirement savings account at all, including almost 40% of those between the ages of 56 and 61.

The average balance of retirement savings within that 56-61 age group is $163,577, which may sound like a lot, but considering that with the oft-used “4% rule” of retirement, this translates to just over $6,500 in sustainable income from savings. Even more scary, the median amount of retirement savings in this age group is just $17,000.

And even if you are on track for retirement, it COULD still be a good idea to take Social Security early an use it as a means of paying for long-term care insurance, where premiums can be in the hundreds of perhaps thousands of dollars a month.

Should I Take It Early or Wait?

While the statistics may seem surprising at first glance, claiming Social Security before full retirement age is a smart financial decision for millions of Americans. On the other hand, there are some valid reasons for waiting, such as being in good health or a history of longevity in your family, or the fact that you’re still working and don’t need the income.

The point is that if you’re trying to figure out the best age for you to claim Social Security, it’s important to consider the points discussed here as well as the overall picture of your life situation and goals.

Could Entitlements Be On The Budget Table?

March 10, 2017 by tony Leave a Comment

On more than one occasion, I have written about how our entitlement programs are going down an unsustainable path. As early as last week I wrote how President Trump’s first budget proposal would not call for any cuts to Medicare and Social Security.

And while this might sound nice, simply put this is impossible to sustain.

As I wrote then…

“If ANYONE has been paying attention, they understand that both Social Security and Medicare are living on borrowed time. Depending upon the estimate you find, both programs are in the hole from $50,000,000,000,000 – $100,000,000,000,000 dollars. By the way, that’s 50 TRILLION to 100 TRILLION dollars in unfunded liabilities. It is fundamentally impossible to shore up these programs with additional taxes alone. The quicker we come to that realization that better.”

Now comes an article from The Hill, Budget chief: Trump could review entitlement reform after first budget.

On the surface, it sounds like Trump being a typical politician, going back on a campaign promise. After all, Trump repeatedly said on the campaign trail that he wasn’t cutting Social Security. Take a look at the video below. 60 seconds in is where the statement is made…

This is in contrast to what the first paragraph of the article states…

“Office of Management and Budget Director Mick Mulvaney said Monday that President Trump could soon review potential reforms to Social Security and Medicare — but he stressed that the reforms under consideration wouldn’t touch payments for current beneficiaries.”

In all sincerity, this is an inevitable result. There is no way that, as 10,000 baby boomers retire EVERY DAY over the next 20 years we will be able to pay the Medicare and Social Security obligations that this nation has promised.

This is just a fact,

The quicker we deal with this the better.

I do like what he said about not cutting benefits to current beneficiaries…

“Mulvaney, a fiscal hawk, said he’s trying to garner support for entitlement reform that follows Trump’s campaign promise not to touch Social Security and Medicare payments for current recipients.”

That should be the cornerstone of any reform bill, but the real issue is with the massive amount of those who will be entering the Social Security and Medicare system in the late 2020’s and beyond,

I am going to keep tabs on this but unfortunately this is a case of pure math. There are too many promises made by government, not enough money to pay for this and no way that taxes can be raised to the point to pay for it all.

My advice to those who are expecting any form of Social Security and Medicare (and any pension by the way) in the future is to listen to what the government promises you and divide by 2. That’s what you will probably end up with.

Trump and Social Security…Round One

February 28, 2017 by tony Leave a Comment

President Trump came into Washington as a bull in a China shop, whether you love him or hate him. As such, he literally threatens to “upset the apple-cart” on just about every establishment point of there. Needless to say, for many who are relying on these establishment points of view, they are worried.

Now, I am not here to focus on whether or not Trump is “draining the swamp” as he put it. I will let others bloviate about this.
But as an advocate for seniors, one of the things I have been watching carefully has been the effect of President Trump’s policies on seniors and most of all on the Social Security, Medicare and Medicaid systems they rely on.

I have previously written in the campaign season about Trump’s policy promises as a candidate, his meeting with pharmaceutical manufacturers regarding the cost of prescription drugs and potential Social Security changes under Trump.

That last article, discussing the confirmation hearing of Mick Mulvaney as Budget Director, was probably the most worrisome of all of the news for many senior advocates. You see, Mulvaney is a budget hawk, to say the least. He has been on record in the past as saying that there have to be fundamental changes to Medicare and Social Security for both programs to survive. As I put it in the article (and this is my analysis)…

“If ANYONE has been paying attention, they understand that both Social Security and Medicare are living on borrowed time. Depending upon the estimate you find, both programs are in the hole from $50,000,000,000,000 – $100,000,000,000,000 dollars. By the way, that’s 50 TRILLION to 100 TRILLION dollars in unfunded liabilities.

It is fundamentally impossible to shore up these programs with additional taxes alone. The quicker we come to that realization that better.”

That is my take as a 46-year old who knows those programs won’t be around for me. I understand that and am taking action to prepare myself. But what of all the others out there?

What this country needs is someone with political courage to point out the facts to the American people and make the changes NOW, because the sooner we fix this the less pain we will all experience. But what do we get instead?

We get Trump’s first budget proposal, which will spare these programs from any cuts now. On the surface, this sounds wonderful, but as the Yahoo! Finance article explains, Social Security and Medicare are living on borrowed time and don’t need a “kick the can down the road approach”. They need real leadership and moral courage to fix.

Instead, what will we be getting from this first budget proposal…

No entitlement cuts
Plans to cut middle class taxes
Simplify the tax code
Spend an extra $56,000,000,000 on Defense

All of these may be great talking points but they leave serious questions to address…

With all of the entitlement programs hurtling towards bankruptcy, what measures will be taken to fix the massive amount of unfunded liabilities in these programs (currently estimated at up to $100,000,000,000,000 [that’s trillion])
How are we going to cut taxes and spend more on Defense without exploding the debt even further?
I am all for a strong defense but an extra $56,000,000,000 (billion)? If you list all the countries by military expenditure, the United Kingdom comes in #5 in world expenditure with $55,000,000,000 TOTAL.

By contrast, Russia spends $66 billion TOTAL, Saudi Arabia $87 billion and China about $215 billion.

This is a colossal amount of money and with the current state of our economy one must wonder if that money could be better allocated.

Which brings me back to Social Security, Medicare and such. There will be no cuts this year, or likely throughout a Trump Administration. This is obviously a good thing short-term. A promise was made many years ago by the government to those retiring today and it should be kept.

What I worry about, as I have studied these programs more and more, is that they are ticking time bombs, and when they eventually turn negative, as every single government report indicates they will, the results will be devastating. But for the moment, all will continue as is. And that’s the problem.

If You Go Into a Nursing Home Do You Have To Hand Over Your Money and Home?

February 22, 2017 by tony Leave a Comment

Today, I am starting a new feature on the blog…Your Questions Answered.

This is where my readership send s me a question, I answer it and then publish the answer. For the longest time I have gotten questions and answered people directly.

Now, however, I am going to start to publish these answers.

The first question comes from Betty J., who asks…

I would like to know if you go into a nursing home do I have to hand over my money and home?

And here is my answer…

Betty,

That’s a great question, but it’s also a legal question so you need to understand first that I am not a lawyer and as such cannot give legal advice.

However, I can tell you how to proceed to get the advice you need.

So let go over some particulars…

1) Nursing home costs are HUGE. In 2012 when my mother was approved for Medicaid to pay for her nursing home costs it was $14,200 a MONTH for the facility
2) There are specific, legal ways for you to shield your assets from nursing home costs, but I would recommend that you get competent legal advice specific to the state you are in so that you can legally protect your assets.

Here is why…

First, you need to understand that Medicaid is a joint Federal/State program. This means that each state has its own rules regarding what is permitted when it comes to protecting your assets from the long term care costs like a nursing home.

Something that is an allowed practice in one state is actually illegal in another.

Second, you must deal with the “Medicaid Look Back Period”, which currently stands at 5 years. This means that when you apply for Medicaid to cover nursing home costs the government will look back into your financial history for 5 years to see what money you had back then. They are looking to see if you have transferred any money to relatives to make it look like you are destitute so that Medicaid will pay for the nursing home.

So, understanding that you have to deal with this 5 year look back period, how do you go about protecting as much of your money and your home as possible?

The first thing to do is to realize you need to start NOW. Take action immediately. And what I would recommend is to see an elder law attorney in your area to go over your finances and see what can be legally protected.

This brings up the question. How do you find the right elder law attorney for you? There are two suggestions I could give you…

1) Many elder law attorneys have free seminars where you can go and ask questions like the one you are asking me. I attended one and wrote about it. You can view that article by clicking here.

2) If you can’t find a local seminar (and you should be able to because they are advertised all over the place) then you need to go through my tips on how to find an elder law attorney.

They are listed here…

I hope this helps. Good luck and get started NOW protecting yourself.

If you have a question, feel free to ask it by contacting me here.

Intergenerational Mentoring Programs

February 20, 2017 by tony Leave a Comment

What are intergenerational mentioning programs?

Simply put, they are programs designed to increase the sense of self-worth and community involvement among seniors by allowing them to participate in local youth activities and provide a guiding hand to those who need a helping for local youth.

These programs, typically designed to assist at-risk youth, those who will have a harder time transitioning into adulthood successfully.

And as I learned at the recent Aging-In-Exurbia event, seniors truly do want to remain productive and contribute to society. These types of programs are one way of achieving that.

These at-risk youth could take the form of those with single parents, who have been in trouble with the law, in foster care, etc…

The relationships between the volunteering senior and the young adult, however, are designed to assist both.

While the young adult receive mentorship from an impartial source, it could be argued that the senior actually gets more out of the program.

Some of the benefits could include…

Increased self-esteem
Improved health outcomes
Reduced isolation
Increased academic achievement (for the young adult)
Reduced delinquent behavior
Improved social emotional skills

The program primary purpose is to help the at risk youth, where intergenerational mentoring…

…is a suggested strategy to increase mentors’ sense of self-worth, accomplishment, and well-being (YG-Mentoring, CDC-Thornton 2002, SCL 2016, PIRE-Thompson 2014). Older adults who participate in intergenerational mentoring programs become part of a network of volunteers and develop meaningful relationships with their mentee(s) (YG-Mentoring). Available evidence suggests that intergenerational mentoring can also improve social connectedness, physical and mental health, functioning, and self-esteem for mentors (PIRE-Thompson 2014, Glass 2004).¹

These are the benefits for the seniors, but what about the youths…

Intergenerational mentoring can improve participating youth’s attitudes toward aging and older adults, increase academic achievement and social development, and decrease substance use and school absences (PIRE-Thompson 2014). Overall, mentoring programs increase positive educational outcomes for participants (Campbell-Wilson 2011) and appear to reduce delinquent behavior for youth at risk of delinquency
(Campbell-Tolan 2013, DuBois 2011).

There are many such programs across the country like this…

Many intergenerational mentoring programs exist across the country. For example, Across Ages, which started in Philadelphia, PA and now has over 50 sites, Experience Corps, which is in sixteen states and Washington DC, and Intergenerational Bridges in Maryland, Virginia, and Washington DC (HFRP 2012, SAMHSA-NREPP, AARP-Experience Corps, JCA-Interages programs).

If you live in one of these areas, you can contact them directly. If not, I would reach out to your local or state Office of the Aging for more information to see what is available in your area.

1-http://whatworksforhealth.wisc.edu/program.php?t1=20&t2=6&t3=84&id=326

Medicare Part B Excess Charge

February 6, 2017 by tony Leave a Comment

What are the Medicare Part B Excess Charges? And will you have to pay them. That is the focus of this article.

First of all, you have to understand what Medicare B is, and I am sure that many of you do. But for those who don’t Medicare Part B is that Medicare coverage that covers doctor’s visits and durable medical equipment. Medicare Part B covers 80% of the costs of these doctor’s visits or for the designated equipment.

As far as the remaining 20%, you either pay that out-of-pocket or through a Medicare Supplement Plan that you own.

Currently in 2017 the monthly premium for Part B is $134 a month (for those making $85,000 a year).

Now, where does this Medicare Part B Excess Charge come into play? Here’s how…

If your doctor does not accept what is known as Medicare assignment, they are allowed to have an “excess charge” that is passed along to you.

First, what is assignment? Medicare assignment is the full cost of a procedure as deemed by Medicare. They have a listing of the costs of every possible procedure that you may have to have done to you. They also have with this list of procedures what it should cost to perform.

So, Medicare will pay the doctor a certain amount for the cost of your visit, procedure, test, etc… But if the doctor makes the determination they want more, they are allowed to charge more and pass that along to you.

To help you understand this better, let’s say you go to the doctor and a lab test costs $500. Medicare might pay that but the doctor might want more. In this case, they can charge an “excess charge” of up to $75.

Note: they are limited to a maximum of 15% over-and-above the Medicare assignment fee to charge you. So, in this example if Medicare is paying $500 the doctor can charge a maximum of $500 x 15% = $75 as an excess charge.

Is There Any Help In Paying the Medicare Part B Excess Charge?

There MAY be help. If you have purchased a Medicare Supplement Plan they may pay for the excess charge. Currently, only Plans F & G pay for the excess charge.

Source: https://www.medicare.gov/supplement-other-insurance/compare-medigap/compare-medigap.html

And it should be noted that certain states do not allow doctors to charge the excess charge…

Connecticut
Massachusetts
Minnesota
New York
Ohio
Pennsylvania
Rhode Island
Vermont

The best way to shield yourself is to ask your doctor up front. If they take Medicare assignment then you are set, but if they plan charging more maybe you need to think about getting another doctor.

President Trump and Prescription Drug Costs

February 5, 2017 by tony Leave a Comment

It’s tough these days not to go online and NOT see the word “Trump” in one way or another. But when I saw this, I was extremely hopeful.

The title of the article, “Trump Tells Drugmakers to Manufacture in the U.S.” piqued my interest. Mainly because I understand what the high cost of medications has done to the wallets of seniors.

So as I read the article, I was far more focused on what President Trump was saying about drug prices than I was about anything else. Here are a few of the tidbits…

“We have to get the prices down,” Trump said. “We have to get the prices way down.”
“We have to get lower prices, we have to get even better innovation, and I want you to move your companies back to the United States,” Trump said. “I want you to manufacture in the United States.”

Trump also said he wanted to make it easier for pharmaceutical companies to win regulatory approval for their products.

“You’re going to get your prices either approved, or not approved,” the president said. “But it’s going to be a quick process. It’s not going to take 15 years.”

Now, if you are someone who is dealing with the high cost of prescription medications, this should come as a godsend to you. Because President Trump hit the nail on the head as to exactly what the problem is with high drug costs.

And that is the FDA-approval process and government-sanctioned monopolies for drug manufacturers.

Don’t believe me? Check out this study from the Journal of the American Medical Association.

The article, “The High Cost of Prescription Drugs in the United States – Origins and Prospects for Reform” was written in August of 2016 and hits on some familiar topics. But most important are the conclusions that the study draws at the end of the article…

“Conclusions and Relevance High drug prices are the result of the approach the United States has taken to granting government-protected monopolies to drug manufacturers, combined with coverage requirements imposed on government-funded drug benefits. The most realistic short-term strategies to address high prices include enforcing more stringent requirements for the award and extension of exclusivity rights; enhancing competition by ensuring timely generic drug availability; providing greater opportunities for meaningful price negotiation by governmental payers; generating more evidence about comparative cost-effectiveness of therapeutic alternatives; and more effectively educating patients, prescribers, payers, and policy makers about these choices.”

Read that again and let it sink in for a second. Here are the points that truly pissed me off when reading this…

High drug prices are the result of the approach the United States has taken to granting government-protected monopolies to drug manufacturers
Enhancing competition by ensuring timely generic drug availability

You see, when we complain about the cost of prescription drugs, understand that the prices are so high BECAUSE OF THE GOVERNMENT PICKING THE WINNERS AND THE LOSERS IN THE MARKET. Lobbyists pay politicians to create the monopolies so that only one manufacturer can create a drug for as long as possible. That is why the price skyrockets. There is no reason for the manufacturer to keep prices low if only one company can manufactures a particular drug.

The sad part is that most people, when seeing the high prices, then want INCREASED GOVERNMENT REGULATION OF THE PHARMACEUTICAL INDUSTRY, not realizing that it is these government regulations keeping the costs up.

So if Trump can succeed in reforming the FDA and streaming not only the approval process of new medications but also increasing the amount of generic medications on the market, then we will see the prices coming down to more manageable levels.

I for one hope he succeeds.

Could There Be Changes To Social Security and Medicare Under Trump?

January 26, 2017 by tony Leave a Comment

I came across this article from Yahoo! Finance, discussing the confirmation hearing of former Congressman Mick Mulvaney (R-SC) to serve as President Trump’s Budget Director.

The article starts…

Social Security, Medicare and Medicaid need significant changes to be preserved for future generations, President Donald Trump’s pick to head the White House budget office told Congress Tuesday.

Rep. Mick Mulvaney’s comments at his confirmation hearing stand in sharp contrast to Trump’s campaign pledges not to cut the programs.

When I first read this, the only thing that I was surprised about what the level of indignation in the 2nd paragraph.

And that is because if ANYONE has been paying attention, they understand that both Social Security and Medicare are living on borrowed time. Depending upon the estimate you find, both programs are in the hole from $50,000,000,000,000 – $100,000,000,000,000 dollars. By the way, that’s 50 TRILLION to 100 TRILLION dollars in unfunded liabilities.

It is fundamentally impossible to shore up these programs with additional taxes alone. The quicker we come to that realization that better.

If you would like an explanation as to why this happened, check out the video on this page, “Why Social Security Is Going Broke…Just Explain It” published by Yahoo Finance.

Now, what does this mean for seniors today…

Mulvaney, a South Carolina Republican, said he would not propose cutting Social Security or Medicare benefits for people already receiving them. “I’m not making my parents go back to work,” Mulvaney said.
But, he added, younger workers should expect to work longer than their parents. He also said Medicare should be means-tested, which means benefits would be limited for wealthy retirees. They already pay higher premiums.

I agree with both points he made. While Mom passed away 2 years ago, Dad is struggling by on limited means and could not afford a cut. And from the emails I receive each day for help it is very apparent that for seniors throughout the country the majority are in that position.

As far as younger workers (meaning my generation) I understand that this will be a bitter pill to swallow, but if the changes need to be made then MAKE THEM NOW SO PEOPLE HAVE TIME TO PREPARE!!!

The added advantage to making changes now is that the sooner these changes are made the smaller the changes will need to be.

It should also be noted to give as impartial a view to this issue that Mulvaney’s statements as President Trump’s proposed budget chief contradict what then-candidate Trump said on the campaign trail. Repeatedly Trump said that he would not cut from either Social Security or Medicare.

And while it might be true for a Trump Administration, whether it lasts 4 or 8 years, the fact of the matter is that changes must be made to insure the survival of both programs. With 10,000 baby boomers turning into seniors every day and swelling the Social Security and Medicare rolls to the breaking point, the current system CANNOT survive in its present form.

I have written about this point on more than one occasion, and you can see some of the articles here. The premise of the articles is the same.

The government made too many promises.
There is no way that raising taxes can solve the problem by itself.
At some point the changes must be made.
The sooner the changes are made the smaller the impact those changes will have.
And unfortunately, expect politicians to continue to “kick the can down the road” as long as they can so they don’t have to deal with an irate public.

For having the guts to say what needs to be said, I do give Mulvaney credit. But I doubt that enough politicians will be willing to come together in the current political climate to work through a combined effort to both raise taxes AND reduce benefits on future generations to keep these programs on solid financial footing until the situation becomes untenable.

As Sen. Debbie Stabenow, D-Mich, said, “I think folks on Social Security and Medicare ought to be really worried. The alarm bells should be going off right now.”

But those alarm bells should have been going off two decades ago in Washington. But that would have required political courage on both sides of the aisle.

Free Smartphone for Low-Income Families

January 20, 2017 by tony 2 Comments

I have previously written about my experience getting a free cell phone for Mom. You can read about that and also check out the video below so I don’t want to repeat everything that I wrote there. But the question was broached to me recently about the possibility of getting a free smartphone for low-income families, including seniors.

And I have to say, I hadn’t heard of it. If you take a look at that previous article, you can see that the previous cell phone that Mom got through Assurance Wireless was a very basic phone. It made calls and barely was able to text. So I decided to do a little research and find out a how to get a free smartphone from the government, if possible.

Free Smartphone For Low-Income Families

The first thing I looked into was whether or not this was possible. I decided to check Assurance Wireless, Safelink Wireless and Lifeline and really didn’t get anywhere. There is no requirement from companies that administer the free cell phone program from the government actually carry smartphones with touch screens.

Video Overview of the Free Cell Phones For Seniors Page

However, many providers will allow you to upgrade your free cell phone plan to get a smartphone at a nominal free ($30-$50). But there are two that I wanted to specifically mention…

Budget Mobile

Budget Mobile is a relatively new player in the free government cell phone market but they definitely offer touch screen smartphones and more. As their website states…

Budget Mobile helps out low income individuals by offering free LifeLine cell phones that include free cell phone service. In an effort to help those who have a hard time paying their monthly cell phone bills, a free government cell phone and free cell phone service from Budget Mobile is the perfect solution.

This program is intended to provide financial relief to low income individuals who are having trouble paying their monthly bills. By participating in the free government phones program through Budget Mobile with free cell phone service, eligible recipients will be able to make calls, send texts, and use wireless data without the worry of having their service getting cut off. There is no cost and there are no contracts.

Whether you’re calling to make a doctor’s appointment, conducting an interview over the phone with a potential employer, or texting your niece to babysit your kids while you run an errand, this free cell phone service from Budget Mobile will be there for you every step of the way. ¹

Qualifying For A Free Government Smartphone

To qualify for the program through Budget Mobile (or any other carrier), your total household income must be at or below 135% of the federal poverty guidelines in states that follow the federal eligibility criteria, OR you currently qualify for one of the following programs²…

Medicaid (this is how Mom qualified…I merely sent in her Medicaid number and 5 days later the phone, which you can see below, arrived)
Food Stamps/Supplemental Nutritional Assistance Plan
Supplemental Security Income [SSI]
Temporary Assistance for Needy Families [TANF]
Supplemental Rental Assistance [Section 8]
Federal Public Housing Assistance [FPHA]
The National School Lunch Free Lunch Program
Low Income Home Energy Assistance Plan

Benefits From Getting A Free Government Cell Phone

You will receive…

Free Cell Phone with Minutes (typically 250-400 a month depending on the carrier)
Free Voice Calls
Free Text Messages
Free Mobile Data (available in some states)

Can You Use An Existing Smartphone?

Now, if you already have a smartphone you would like to hook into the government cell phone program you can do that as well through enTouch Wireless. This allows you to get involved with the government program without you having to ditch the phone you love, if you choose to.

As the enTouch Wireless website states…

Bring your smart phone to our network and use it!

“No more monthly cell phone bill! Follow the directions to check if your phone qualifies for FREE phone service. You may be able to bring your smartphone to the enTouch Wireless network*. The Lifeline Free Government Cell Phone and Wireless Service Benefits include free monthly voice, text and internet that can be added to many cell phones. enTouch will add another 100mb of Internet for free tool.”³

Not all phones will work on their network, but they do have a widget on this page to allow you to check whether or not your existing smartphone can be utilized on their network. Just follow the instructions and then if it is you can apply.

Overall I was very surprised to know that there are a few options to get a free smartphone for low income families. And this list of carriers, Budget Mobile and enTouch, will probably be added to over time. So if you do in fact know of one that wasn’t on the list let me know in the comments below…

Reference:

Proposed Social Security Changes

December 11, 2016 by tony Leave a Comment

This past Thursday, it was announced that a Congressman from Texas, Rep. Sam Johnson (R-Tx) put forward legislation that would bring about deep cuts in Social Security.

The summary of the legislation can be found in this article from Yahoo! Finance.

As the article states, the proposed bill, would…

“slashes benefits, adds means testing, and would raise the retirement age from 67 to 69.”

Naturally, this is drawing a lot of criticism and fire coming right after the election season and just 5 weeks before the inauguration of President-elect Trump. And the worry for millions of Americans now, as well as my generation which will be collecting 15-20 years from now, is what will be left for if these cuts go through.

So I wanted to see if I could cut through the noise and get to the heart of the matter, while presenting both of the argument as well as my own opinions…

First, let’s talk about what the proposal from Rep. Johnson actually says. I know that there is a lot of hysteria in the analysis of what he said (if you want to be typical biased and skewered article out there like this one in the L.A. Times click here) but this is what his actual press release says…

For years I’ve talked about the need to fix Social Security so that our children and grandchildren can count on it to be there for them just like it’s there for today’s seniors and individuals with disabilities,” said Johnson. “My commonsense plan is the start of a fact-based conversation about how we do just that. I urge my colleagues to also put pen to paper and offer their ideas about how they would save Social Security for generations to come. Americans want, need, and deserve for us to finally come up with a solution to saving this important program.”

The Social Security Reform Act of 2016 ensures Social Security will be there when Americans need it by:

• Modernizing how benefits are calculated to increase benefits for lower income workers while slowing the growth of benefits for higher income workers.
• Gradually updating the full retirement age at which workers can claim benefits. The new retirement age better reflects Americans’ longer life expectancy while maintaining the age for early retirement.
• Ensures benefits keep up with changes in the economy by using a more accurate measure of inflation for the annual Cost-of-Living-Adjustment.
• Protecting the most vulnerable Americans by increasing benefits for lower-income earners and raising the minimum benefit for those who earned less over the course of long careers.
• Promoting flexibility and choice for workers by eliminating the Retirement Earnings Test for everyone. This allows workers to receive benefits—without a penalty—while they are working, or fully delay retirement and wait to receive benefits. For those who delay claiming benefits, they can receive increases in a partial lump sum or add it all to their monthly check.
• Encouraging saving for retirement by phasing out Social Security’s tax on benefits for workers who continue to receive income after they retire or stop working due to a disability.
• Targeting benefits for those most in need by limiting the size of benefits for spouses and children of high-income earners.
• Treating all workers fairly when their Social Security benefits are calculated by using the same, proportional formula that looks at all of an individual’s earnings over the course of his or her career.

Source: http://samjohnson.house.gov/news/documentsingle.aspx?DocumentID=398516

Now, as you read this, remember two things…

• Being he is a Republican; every Democrat will hate this (because it came from a Republican). And the opposite holds true. Every Republican will love it because it came from a Republican.
• This is the Congressman’s own spin on the issue, and has not be subjected to analysis by the Congressional Budget Office, which provides non-partisan analysis (supposedly) for the Congress to evaluate legislation.

So, how do you cut through the noise and determine how this will affect…

Know The Facts About Social Security

First and foremost, understand that Social Security IS living on borrowed time as it exists right now. One of the best explanations I have ever seen comes from a Yahoo! Finance article on the subject written a few years ago…

The reality of the situation is that there needs A MAJOR CHANGE in Social Security for the program to survive long term.

Changes Have Come Before

In the 1980’s Republicans and Democrats came together in the form of President Reagan and Speaker of the House Tip O’Neill to sign legislation to reform and save Social Security.

As this article in U.S. News and World report states,

It offered a compromise that has had lasting effects on Social Security politics and policies. Some of the proposals were less than ideal; one that was ultimately enacted into law raised the regressive payroll tax, which hit working- and middle-class Americans harder than wealthier citizens. Nonetheless, the 1983 agreement did succeed in extending the trust fund’s solvency for a couple of generations by raising the retirement age to 67 from 65 (to be phased in by 2027); imposing a six-month delay in the cost-of-living adjustment; and requiring government employees to pay into Social Security for the first time.

Changes Will Come Again, And Must Come From Both Sides of the Aisle

As the Yahoo! Finance article and video showed, Social Security is not a Republican or Democratic problem…it is a demographics problem. We originally had 11 people paying into Social Security for every person receiving benefits. Within the next 10 years we will have 2.3 people paying in for everyone paying benefits.

Simply put that is not sustainable.

And this is the biggest reason that Social Security reforms must take. And yes, many of you may claim that the government has raided the Social Security Trust Fund in the past (for an explanation of that click here but we are in the midst of the greatest demographic cliff in history as 76,000,000 baby boomers start to retire.

That’s the problem.

And while reform is needed, reform inevitably needs to come from both sides of the aisle. That means that things like raising the Social Security age and going to HAVE to happen. And yet, it also means that things like the Social Security cap where you do not pay Social Security taxes on income above a certain amount (currently as I write this it is $118,000 but does get indexed upward over time) are going to have to happen.

What we need are politicians with courage to look us in the eye and tell us the way things actually are. The problem with that is so few politicians do this that we kick “kicking the can” down the road until the problems become too great for us.

We are 10 years away from this being the case with Social Security.