The Future Of Social Security

On June 9, the Bipartisan Policy Center (BPC), a Washington think tank, released the recommendations of its chartered Commission on Retirement and Personal Savings, which examined whether Americans are meeting the financial retirement goals.

Former Sen. Kent Conrad (D-ND), a member of the 2010 Bowles-Simpson Commission that proposed a variety of dramatic cuts, and Mr. James Lockhart III, a former Director of the Federal Housing Agency, co-chaired the commission composed of 17 former public officials and experts in savings and retirement policy.

The commission was tasked to make recommendations on how to increase national savings, improve income security during retirement (including Social Security reforms), and guard against the potential costs of long-term care and the loss of income due to disability.

Fifty recommendations came out of the commission, including regulations harmonizing early-withdrawal rules for IRAs and 401(k)-type plans, ending subsidies that encourage the use of home equity for pre-retirement consumption, increasing the Social Security retirement age to reflect increases in life expectancy, and increasing the amount of income subject to Social Security taxes.

The commission also recommended linking Social Security cost of living adjustments to the chained Consumer Price Index (CPI) beginning in 2017.

Many of the proposals make sense, but MOAA and virtually all other associations representing retirees have long opposed the chained CPI, which would depress annual COLAs to retired pay, Social Security, VA disability compensation, and other federal annuities by about 0.3 percent per year – which would compound to impose significant payment cuts over time.

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John Doe
AUTHOR dpadmin


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