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You Need to Know About These Plans to Expand Social Security

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SmartAsset: You Need to Know About These Plans to Expand Social Security

Social Security has been a hot button issue in American politics for a long time. In fact, in Washington, D.C. circles, Social Security used to be known as the “third rail” of politics — if you touch it, you die. It’s an important social safety net, especially for retirees, and amid fears around it’s potential insolvency, politicians of all stripes are frequently trying to come up with ways to fix or alter the program. The President of the Alliance for Retired Americans, in fact, recently appeared in the halls of the U.S. Senate to explain why Social Security must be expanded — and how to do it.

For more help with figuring out how Social Security will fit into your own retirement plans, consider working with a financial advisor.

Social Security Basics

SmartAsset: You Need to Know About These Plans to Expand Social Security

Social Security is one of the tent pole programs of the American social safety net. It was established in 1935 by President Franklin Delano Roosevelt as part of his New Deal suite of programs designed to fight the Great Depression.

Social Security is designed to make sure that senior citizens don’t end up completely destitute. Retirees get paid a monthly check in retirement. The amount they get paid depends on how much they contributed to the Social Security fund through taxes while they were working and how old they were when they retired.

The retirement of Baby Boomers and the smaller workforce that is expected to follow, however, has caused much consternation about the future of the program, with many expecting the program to run out of money.

Suggestions to Expand Social Security

With worries about Social Security abounding, people from all parts of the political spectrum have come up with possible solutions, from privatizing the program entirely to massively expanding the Social Security tax to better fund the program.

Recently, Robert Roach Jr., president of the Alliance for Retired Americans, testified at a hearing of the Senate Budget Committee to talk about how his group believes Social Security should be expanded — testimony presented in concert with a proposal from Sen. Bernie Sanders’ (Ind. – VT) proposed legislation to increase benefits by $200 per month and expand Social Security taxes on the wealthiest Americans to extend the solvency of the program until 2096.

The other proposals made by Sanders and supported by Roach and the Alliance for Retired Americans include increasing the cost-of-living adjustments by adopting the consumer price index for the elderly in order to create bigger yearly pay raises and updating the special minimum benefit for Social Security recipients. This is expected to help low-income workers stay out of poverty.

“We need improvements because older Americans today are hurting,” said Roach at the hearing. “And I have seen examples for myself firsthand. I have observed on many occasions seniors at the supermarket checkout who had to put food back because the grocery bill was more than they had. Seniors are having to make decisions between food and medicine on a daily basis.”

Bottom Line

SmartAsset: You Need to Know About These Plans to Expand Social Security

Social Security is an important program that helps senior citizens stay afloat financially. While payments aren’t generally enough to live on on their own, the payments are part of a full retirement plan. With many concerned about the future of the program, there are proposals for expanding the plan, including an increase to payments and creating bigger cost of living increases.

Retirement Saving Tips

  • To figure out how Social Security works in your retirement plan, seek the help of a financial advisor. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • Social Security isn’t going to fund an entire retirement. To do that, you should make sure to take advantage of any workplace retirement plan you have, such as a 401(k).

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