Trump’s latest Social Security con
All that’s bad. But here is the worst part: When combined with his comments that he would like to “terminate” the payroll tax, which funds Social Security, Trump is revealing yet another con. He’s not, as he’s claimed from the day he announced his run for president, going to save Social Security. Instead, Trump is promoting a scheme to weaken the program that keeps a majority of the elderly out of poverty.
All of this leads to cascading financial effects, none of them good. People will draw down retirement savings at an age when they are harder to replace. Because older workers are more likely to have health concerns, they are more likely to shell out funds for expensive COBRA health insurance coverage, instead of narrow network but subsidized Affordable Care Act exchange plans. And, finally, they will sign up for Social Security retirement benefits at the first opportunity, at age 62, instead of waiting till they are 66-67, when they can receive full benefits, or 70, when they get a bonus — almost certainly leading to more straitened financial circumstances in old age.
One response to this reality? The less-than-accurate conviction of many workers — and not a few advice-givers — that they can work in fulfilling and well-paid positions well past traditional retirement age.
This is, as I’ve pointed out in the past, so much hogwash. All of us — except the very unlucky — will not only get old, but middle-aged, which is when age discrimination starts. Studies show that a majority of people exit the workforce earlier than they expect — sometimes due to health, but often because they are unable to regain their professional footing after a layoff. Age discrimination is an immense problem in almost every single profession, and it impacts women at earlier ages — think 40 — than men.
But Trump is doing the opposite. He’s offering up a poisoned chalice. The pressure to make the payroll tax postponement permanent will be immense, especially as recession-wary Americans are preparing their 2020 returns. But the decision to do so will further undercut the Social Security trust funds. It doesn’t take a lot of imagination to understand that will put the popular program in almost existential danger.“
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