“My plan keeps our promise to America’s seniors by fully protecting their benefits and leaving them unchanged. Younger workers will be given the option of growing their personal wealth for the future and participating in a successful investment program similar to the one enjoyed by Members of Congress,” Thompson said in a press release.
Thompson said he would leave Social Security benefits received by current retirees and those near retirement completely unchanged – he said that no one now over the age of 57 would be affected – and “fully preserve” their annual cost of living adjustment.
The “Rest” of Us
As for the rest of us, the plan to “Save Social Security and Protect Seniors” has two primary elements:
- Provide voluntary personal retirement “add on” accounts to supplement benefits, and
- Index Social Security benefit formula for prices, not wages.
Thompson proposes to give current workers, who are not already receiving Social Security benefits, the option of making voluntary contributions into personal retirement accounts, similar to a 401(k) plan. Workers would contribute 2% of their monthly wages, which would be matched by the federal government.
The plan also calls for indexing Social Security benefits for prices instead of wages. Current law – this was changed in 1978 by President Jimmy Carter – calculates the initial benefit level of Social Security recipients according to the annual increase in wages. Thompson says that by calculating benefits of new beneficiaries according to price inflation, the plan would leave the benefits of all current beneficiaries and those nearing retirement completely untouched.
“There’s no reason to run for President of the United States if you can’t tell the American people the truth about complex issues like Social Security,” Thompson said. “As we speak, Congress is raiding the Social Security Trust Fund. If we don’t act soon, the politicians in Washington will either repay those ‘IOUs’ through tax hikes or benefit cuts.