Wednesday, January 15, 2014

AARP's rival has good Social Security plan

A group that brands itself as a rival to AARP is pushing non-partisan reforms to Social Security that Congress ought to consider. 

Although the  seven-year-old Association of Mature American Citizens calls itself a conservative alternative, the group’s proposal lacks the privatization features that have doomed other plans advanced by groups on the right side of the political spectrum.

AMAC might do better if it eschewed political labels because, in fact, its proposals are voted on by the group’s membership, using a tool that ensures that members can only vote once.

“Our members choose the issues and drive the agenda,” said Andy Mangione, AMAC’s vice president for governmental relations. 

And members have overwhelmingly chosen Social Security and its future as their major concern.

“People don’t save enough for retirement — we know that,” Mangione said.

AMAC’s proposal, for which Mangione has been lobbying on Capitol Hill, takes a two-pronged approach. The first facet would maintain the same or increased benefits for those with lower earnings and the second would   provide a means for all earners to have more income available at retirement.

 It would guarantee cost-of-living adjustments to Social Security recipients annually, using a tiered approach to calculating the COLA. No increases were granted in 2009 and 2010, even though gasoline and food prices rose.

  For beneficiaries with a household income  level less than $20,000,  COLAs would range from a 3 to 4 percent increase..

 For beneficiaries with a household income  between $20,001 and $50,000, the COLA range would be 1.5 to 3 percent.

For beneficiaries with a household income  of $50,001 or higher, the COLA range would be from 1 to 2 percent.

AMAC’s plan also would phase in a change in the earliest retirement age. Starting in 2016, it would add three months each year so that by 2023 it would be 64 instead of the current 62.

Starting in 2017, it would phase in a change to the normal retirement age by adding three months each year so that by 2024, it would be 69 instead of the current 66 to 67, which depends on the birth year.

AMAC’s plan also would lower benefits for higher income earners while maintaining the same benefits for those with less income, beginning in 2019.

The current annual Social Security trustee report projects a shortfall in the program’s trust fund of 4.5 percent in 75 years. If AMAC’s proposals were adopted, there would be a surplus of .17 percent.

Meanwhile, the plan also calls for a voluntary, portable tax-deferred Early Retirement Account program implemented through employers. It would allow the employee to set aside up to $5,200 annually and the employer to contribute up to $2,600 annually. Both employees and employers would be eligible for tax deductions.

Unlike 401K plans, which are routinely tapped into for a variety of reasons, the ERA would not be available until retirement. Enrollees could accumulate up to $354,000, Mangione said.

AMAC’s common-sense proposals apparently are catching on. Membership is growing by 40,000 every month, and has doubled to about 1.1 million from 500,000 in 2012. AMAC seeks to designate representatives from each  of the nation’s 435 congressional districts and eventually hopes to organize state chapters.

AMAC membership costs $16 annually and is available on the organizations’s website at Anyone over the age of 50 may join and 40 percent of the group’s members are not retired.

Dan Weber, a family business owner in New York, founded AMAC because he felt the other major 50+ organizations were too liberal and did not represent his views.

But Mangione emphasizes that only members can set the agenda, and they are polled on a weekly basis. The group does not support candidates and has met with 140 members of Congress from both parties.

“We will meet with anybody,” Mangione said.

AMAC’s Social Security reforms should appeal to everyone. They include incentives to save, protection for those with lower incomes, modest restraints for everyone and small reductions in benefits for those with higher incomes.

Congress and the public should rally behind these ideas.

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