AARP Warns of Rising Costs for Seniors, Social Security Insolvency

The AARP is raising concerns about the increased cost of living for American seniors and the looming insolvency of Social Security. Despite the dire need for reforms, few lawmakers on Capitol Hill have proposed plans to address the coming shortfall. According to the Congressional Budget Office, the Old Age and Survivor’s Insurance trust fund will “run dry” by 2032, leading to a 28 percent benefit cut the same year. “Without any reforms, approximately 72 million recipients of Social Security’s old age and survivors benefits will be subject to a 28 percent benefit cut beginning in 2032,” the CBO says. “Policymakers should focus their efforts on protecting lower-income retirees, reducing Social Security’s long-term tax burden on all Americans, and introducing personal ownership options that strengthen retirement security without expanding government dependency,” the CBO — Congress’s nonpartisan budget watchdog — wrote in its analysis. “Reforms are necessary in the immediate term if policymakers want to minimize harm to lower-income retirees and preserve the program overall. Inaction is in itself a choice to allow benefit cuts,” the agency wrote in its report. The AARP added to that urgent call for reform on Thursday, with leaders saying that members of Congress have not done enough to give seniors peace of mind. The executive vice president of the organization, Nancy LeaMond, told reporters on a press call that her advocacy group is preparing for the worst when it comes to projecting a decrease in benefits for America’s retirees. “While we don’t know exactly when the trustees report will be released or what exactly it’s going to say, we expect it to tell us something we kind of already know — that sometime in the next eight years or so, Social Security will have about 80 percent of the money it needs to make full payments,” Ms. LeaMond said, according to The Hill. The new analysis from the CBO — which projects a 2032 insolvency date — differs from the 2025 Social Security trustees report which estimated that insolvency would not come until 2033.“Policymakers from both parties have known for decades that Social Security’s finances are unsustainable but have consistently failed to act, leaving the program an estimated $25 trillion short over the next 75 years — a gap between projected inflows and benefit payments that continues to grow,” the Bipartisan Policy Center wrote in its analysis of the trustees report. With the vast majority of congressional lawmakers focused on their re-election campaigns, few have focused on structural reforms to America’s earned benefits systems, including Social Security and Medicare. One of the few pieces of legislation currently being kicked around Capitol Hill is a bill from two senior members of the Senate Health, Education, Labor, and Pensions Committee — the Republican chairman, Senator Bill Cassidy, and a senior Democratic member, Senator Tim Kaine. Their legislation is simply known as “the Big Idea,” and it would create a $1.5 trillion sovereign wealth fund to help deal with Social Security’s looming insolvency. The Bipartisan Policy Center, which has long advocated for a combination of payroll tax increases and reforms to benefits payments, calls the Cassidy–Kaine proposal a “creative addition” to the current menu of options to keep the fund solvent, though it would not be without risk. “Such a fund is not without risk, however, and even in a best-case scenario, it will not fully close the long-term shortfall, meaning that a balanced package of programmatic reforms would still be needed to ensure Social Security can continue to support older Americans for decades to come,” the organization writes in its analysis.

AARP Warns of Rising Costs for Seniors, Social Security Insolvency

AARP Warns of Rising Costs for Seniors, Social Security Insolvency

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