Your Future at Stake: The Vital Role of Social Security in the 2024 Presidential Election

As we gear up for the 2024 Presidential Election, I wanted to chat about something super important for all of us planning for retirement—Social Security. With so many changes in the way we save for retirement, Social Security is becoming a bigger deal than ever. Let's dive into why this is and what the candidates are saying about it.

The Growing Dependence on Social Security
You might have heard that many of us aren't saving enough for retirement, and it’s true. Here's why Social Security is becoming more crucial:

Savings Are Falling Short:
 

• 401(k) Plans: Many Americans rely on 401(k) plans for retirement, but these accounts often don't provide enough savings. Vanguard's "How America Saves 2023" report found that the median 401(k) balance for individuals aged 65 and older is only about $88,488 (Vanguard)​. This is insufficient to cover even modest retirement expenses.
• Personal Savings: The Federal Reserve's 2022 Survey of Consumer Finances revealed that the average retirement savings for families aged 55-64 is $537,560, far below what most financial experts recommend​ (Federal Reserve)​.
• Goodbye, Pensions: Remember those reliable pension plans our parents or grandparents might have had? Well, they're almost gone now. Only about 17% of private-sector workers have access to them today​ (PRC)​.
• Rising Costs: Everything is getting more expensive, especially healthcare. Medical costs keep going up faster than other expenses, making it even harder to stretch our savings ​(Bureau of Labor Statistics)​.

Social Security: The Lifeline
With all these challenges, Social Security is more important than ever. It provides a steady income that helps cover our basic needs. But here's the kicker: Social Security by design was intended to replace only 40% of a person's working income, yet 1/3 of baby boomers and Gen Xers will rely on their social security benefit for about 90% of their retirement income, according to Social Security Agency surveys. Social Security can't replace the pre-retirement standard of living, nor was it intended to replace it. And another thing, with Social Security projected to pay only 75% of benefits by 2035 if nothing changes, it is crucial to pay attention to what our future leaders plan to do about it (SSA).

What the Candidates Are Saying
Republican Candidates:

Former President and GOP Candidate Donald Trump: Trump promised not to cut Social Security benefits, but during Covid 19 pandemic he deferred payroll taxes and on the campaign trail has talked about doing this again. Payroll taxes fund Social Security and this could create funding issues down the line exasperating the funding issues (The American Presidency Project).

General GOP View: Republicans often suggest privatizing Social Security or raising the retirement age to keep the program solvent without hiking taxes. There are many types of privatization, but all privatization plans put the risk on the individual. Each worker bears the full consequence of shortfalls in deposits or returns on his or her individual account, and the ultimate benefit would depend on investment returns (Brookings). I know I am commentating here, but suppose you're one of the unlucky people who is retiring during another economic downturn? As for raising the retirement age, the Center on Budget and Policy Priorities explained raising the Social Security retirement age would have the effect of cutting benefits by about the same amount as the projected 2033 benefit cut under current law:
“The irony of that argument is that over time, raising the retirement age would yield the same result that they purport to want to avoid — a large, across-the-board benefit cut. Raising the retirement age to 70 would ultimately cut average lifetime benefits for new retirees by nearly 20 percent, whereas if Social Security’s reserves are depleted, congressional inaction would force a 23 percent cut for all beneficiaries.”

Democratic Candidate:
Vice President and presumptive Democratic Presidential nominee, Kamala Harris: Harris will continue the Biden/Harris agenda, which is all about protecting and expanding Social Security. She wants to raise the payroll tax cap so that high earners pay more into the system.

General Democratic View: Democrats Social Security 2100 Act — would include a 2% across-the-board benefit increase, as well as more generous benefits for low-income seniors, and other enhancements. Those benefit boosts would be paid for by making it so earnings over $400,000 are subject to Social Security payroll taxes. Currently, up to $168,600 in earnings are subject to those levies. In addition, the bill would also add a 12.4% net investment income tax for taxpayers earning more than $400,000 (SS 2100 Act).

Independent Candidate:
Robert F. Kennedy Jr.: Kennedy is against privatizing Social Security and wants to expand benefits to help low-income seniors and address economic inequalities. He aims to keep the program strong without cutting benefits, focusing instead on smart funding strategies. There is little stated about how his administration would cover the costs (Kennedy).

Why It Matters
As we look toward retirement, Social Security is something we can't afford to ignore. Whether you’re already saving or still figuring it out, understanding each candidate's plan can help us make informed decisions at the ballot box. This election could shape the future of our retirement security, so let’s stay informed and vote for what matters most to us.

Stay tuned, stay informed, and let’s chat more about how we can secure a better future together.