Damilola Esebame at TheStreet covered the PROMISE Act, introduced by a bipartisan group of senators to force Congress to address Social Security's shortfall before the trust fund runs dry in late 2032. The bill does not itself raise taxes or cut benefits. It assigns the Social Security Advisory Board to draft a solvency plan, requires any resulting legislation to keep the trust funds solvent for at least 50 years, and adds a solvency review every 10 years. Without action, benefits face an automatic cut of about 22%.
My advice to clients, which I shared for the piece: build as if Social Security delivers less than projected, not zero. The program is not going away, and planning as if it will is as much a mistake as assuming it is untouchable.
The practical version is a stress test. Run your retirement income plan against a 20% to 24% across-the-board benefit cut and see what breaks. For some households nothing does. For others, the fix is a modest change now, such as a higher savings rate, a later claiming date or a smaller withdrawal rate in the early years, rather than a painful one later.
Whatever Congress does, the households that modeled the downside will be the calmest ones in the room when the rules change.
Read the full article at The Street →
