Should Retirees Be Concerned With the New U.S. Congress? Experts Weigh In


What does the new Congress have in store for retirees in 2015?

Before the legislative session began, many observers thought entitlement reform would be inevitable in a Republican-controlled Congress.

That sentiment has proven partially correct in the first month of 2015, as lawmakers passed a rule change affecting Social Security [Open Retirement has covered the change, and what it means, here.]

But what else does this Congress have in store for Social Security, pensions and other retirement benefits? And who should be worried?

Retirement expert and PBS TV host Ed Slott told USA Today that older folks have nothing to worry about – it’s the younger generations that should be scared:

“I don’t think it’s a concern for current retirees — those in pre-retirement or already collecting,” says author, CPA and retirement expert Ed Slott, who hosts Ed Slott’s Retirement Roadmap on PBS. “Those people vote. Those entities will not be touched. They will talk about it. They will just trim around the edges. It’s like a third rail — nobody wants to touch that.

“The Millennials, people in their 30s and 40s, they may see something scaled back,” he says. “Social Security was never meant as the sole source of retirement income. You will have to rely on your own savings and your own retirement account. It was always meant as a supplement.”

“For younger people, I would plan on saving without it,” he says. “Benefits are going to have to be curtailed, but not for many years.”

But Rich Fiesta, the executive director of the advocacy group Alliance for Retired Americans, painted a different picture.

He said the recent rule change proves that Social Security will be on the chopping block this year. He told USA Today:

“We’re very concerned on Social Security after the action the House took on the first day,” says Fiesta. “They are arbitrarily changing the rules that handcuffs Social Security in terms of the ability to move funds between the retirement trust fund and the disability trust fund, which has been done 11 times in the history of the program. This last-minute rule change puts the Social Security system as a whole in jeopardy and could subject it to potential benefit cuts over the next two years.”

Anthony LoCascio, a financial planner from New Jersey, also believes the Social Security status quo could come under attack. It might not be benefit cuts, but he thinks some kind of policy change – raising the retirement age, for example – could happen:

“With the number of Baby Boomers — there are 10,000 to 15,000 turning 65 every day for the next 15 years — we will have a strain on Social Security retirement benefits,” says LoCascio. “You will have to do something to adjust for the onslaught of recipients. By 2020 or 2025 there will be more people retired than working. You only have so much money. They will have to make adjustments. And one way would be by increasing the retirement age.”

Read more of Open Retirement’s Social Security coverage here.


Photo by  Tony Brooks via Flickr CC License

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