This month, in Any Social Security Legislative Package Should Include an Automatic Adjustment Mechanism, Alicia Munnell, Director of the Center for Retirement Research at Boston College, recommended that Congress include an automatic adjustment mechanism to maintain Social Security’s desired funded status on an ongoing basis as part of the next round of Social Security reform.
Ms. Munnell said,
“One way to avoid repeated crises and restore confidence in the financial stability of the Social Security program is for any package of solutions to include a mechanism that automatically adjusts revenues or benefits if shortfalls emerge.”
She also presents several other reasons why automatic adjustments should be adopted and discusses how the automatic adjustment process works in Canada for their Canada Pension Plan (CPP).
This is a great idea that I like a lot.
In fact, I like this idea so much that I recommended that Congress adopt it back in 1982 as discussed in my post of May 21, 2023.
I like it so much that I proposed just such an approach and discussed what Canada was doing back in 2015 for a Contingencies Magazine article entitled, “Look to the North for a Better Financing Approach to Social Security”
I like it so much that I proposed a similar approach for personal financial planning for retirees in my post of January 7, 2023.
In
my opinion, adopting automatic adjustments to the system’s tax
rates/benefit provisions to maintain Social Security’s long-range
actuarial balance on an ongoing basis within acceptable guardrails is
simply common sense.
