Cut Social Security? H*ll No!!! - Increase It & Make It Better!!! Part 1

Cut Social Security?  H*ll No!!! Increase It & Make It Better!!! Part 1

Social Security Program is the United States’ BEST government program. Any talk regarding cutting Social Security is pure nonsense and borders on being malevolent. Benefits should be thoughtfully expanded taking into consideration changes in the US economy over the last few decades, such as the erosion of private pensions, the current attack on public pensions, and the virtual elimination of any significant interest being paid by savings banks and credit unions.

Social Security is the highest and the brightest star which shines on America. It shines on every American, tall or short, male or female, no matter where they live, no matter whether they believe in a religion or not, young or old, healthy or disabled, families who lose a wage earner, the poor, the middle class, or the wealthy. It has a major far-reaching influence on our economy. When the eagle flies on the 3^rd day of the month or on the 2^nd, 3^rd, or 4^th Wednesday of the month, the economy takes notice.

Yes, it does need some expansion and adjustments to eliminate a few passing shadows, but it still shines brightly on us all.

Its brilliance and its prominence in the sky and in our universe make it the perfect instrument to employ it to show us the way and use it as a tool for the greater good of America.

I will address potential ongoing changes to the Social Security program in future posts, but today I’d like to throw out an idea to use Social Security to solve two major problems facing America: high unemployment and stagnant earnings and job opportunities for the nation’s twenty and thirty years olds, many of whom are college graduates but are still struggling to make ends meet and are often working two or three jobs.

Is there any interest in these issues out there?

Here it is!  Offer a one- time Social Security “early out” for Social Security retirement benefits. What will this do? If it closely follows the specifics of my proposal, it should lower the unemployment rate and it should free-up the jobs of those taking the early-out, many of which pay reasonably well, and which pay more than the jobs currently held by younger workers who can then fill the slots left by many of the early-out retirees.

Exactly how should it work? (This will apply to Social Security “retirement” benefits only, not widow’s benefits or spouse’s benefits.)  The proposed solution is to add two years to anyone’s age for anyone who is willing to retire immediately upon enactment during a 12 month window of opportunity. This will apply to anyone age 60 to 68 during the early-out window, who for benefit age reduction purposes will then become 2 years older. This will also apply to those who are beyond their full retirement age (FRA), currently age 66 and are delaying their retirement to boost their benefit amount by earning delayed retirement credits (DRC’s). This early-out will not change the formula or calculations on how the early-out person’s benefit is calculated except for the amount of reduction due to age or the number of DRC’s credited. (For those retiring before age 62, before the numbers for their benefit calculation indexing year are available, there may be some projected numbers used that will be adjusted upon age 62 attainment.

However, anyone who takes advantage of this early-out will be required to fully retire.

Using the worker’s actual age, any earnings which exceed the annual earnings test level whatsoever for a person using their real age before becoming eligible for the Full retirement test by a person who retired prior to their full retirement age ($15,120 in 2014) would require a full repayment of all payments received and a voiding of the add two years to your age eligibility. Similarly, any delayed retirement credits paid for months that a post full retirement age early-outer works and earns any income would constitute an overpayment.

The purpose of the early out is to free up jobs for younger workers and to reduce the unemployment rate. Any attempt to collect benefits based on the early out without really retiring will create an overpayment which must be repaid.

One of the reasons why older people are staying in the workforce longer is the abysmally low interest rates being paid on safe investments such as savings accounts or certificates of deposit. As part of the legislation required to be able to offer this one-time early out Congress, should also provide strong incentives to offer “old geezer” savings accounts which pay higher interest amounts on safe investments. If senior drivers can get lower car insurance, there must be some way to legislate higher interest rates for seniors that will permit them to retire with dignity and let the younger generation move up and take their places in the workforce.

The funds for the early out should come for general revenues and it is quite possible that some of the savings could come from reduced Unemployment Compensation costs.

Social Security is the United States’ brightest shining star and beacon. Why not creatively use it to effectuate even more favorable outcomes in our society? I believe this is an idea worth pursuing.

   

Update: Adding 2 years to someone’s age could boost their monthly benefit as much as 13%, or roughly the same amount it would have been increased, anyway, had they merely waited two years, which many of these workers were planning to do before they retired. This is only an approximation, as additional years of work in some instances serves to increase one’s benefit if the earnings in any single year are one of the worker’s 35 highest years of indexed earnings used in the Social Security formula.