This week offers good news to millions of Americans, who may begin receiving a new $25,000 bonus if they meet certain qualifications. According to Newsweek, high school graduates will profit from the Social Security program if Congress approves it.
The American Dream Accounts Act, introduced in the House by Minnesota Representative Dean Phillips, seeks to establish an investment account for each child born in the United States through a Social Security Administration program. Approximately $5,000 would be invested in an index fund and made available upon getting a GED certificate or diploma or graduating from high school.
A New Social Security Payout of up to $25,000 After Americans Graduate
According to the law, most Americans will have access to $25,000 when they reach maturity since they will have earned an estimated 10% annual rate of return by the time they are allowed to use the assets. Representative Dean Philips stated in a statement that “an equal opportunity to achieve the American Dream is critical to realizing the potential of our great country.”
This Act ensures that every child in America has the opportunity to develop and attain their full potential. Philips also emphasized that investment pays off and that now is the time to bet on American principles of self-determination and opportunity for all by passing the American Dream Accounts Act.
Furthermore, the law may make it easier to make a down payment on a house, pay for college, or even start a business, while also allowing students to track the performance of their investment portfolios via a smartphone app. It shouldn’t just be for the wealthy and well-connected.
Jim Pugh, executive director of the Universal Income Project, argued that the American Dream Accounts Act will level the playing field for long-term prosperity by allowing every youngster to follow their aspirations. Additionally, volunteers in the Peace Corps or AmeriCorps would be eligible for a $10,000 incentive payout through the program.
The New Social Security Benefit Will Give Young People More Money to Invest
According to Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, the bill underscores the significance of financial literacy and empowering youth to manage their finances. Beene feels that when people have their own money, they are more likely to see the benefits of investing for the future. For more information on his remarks, please see the full statement.
Finally, if Congress does not make reforms, the fund that distributes Social Security benefits to seniors and persons with disabilities is expected to run out of money by the middle of the 1930s.
According to the most recent official predictions, the principal trust fund that underpins the delivery of Social Security benefits is likely to deplete in 2033 or 2034, with guaranteed payouts declining by over 20%.
The Committee for a Responsible Federal Budget has released an analysis attempting to quantify the impending benefit cut. According to the study, the average dual-income couple would lose $16,500 in benefits each year if they retired when the trust fund was depleted. As the report’s authors note out, both former President Donald Trump and Vice President Kamala Harris promised to “protect” Social Security throughout their campaigns.
However, neither has provided a plan for doing so. According to the nonpartisan advocacy group, Trump has advocated removing taxes from Social Security benefits, which would deepen the program’s financial woes. As a result, Congress must solve the program’s financial concerns in the coming years to ensure that millions of Americans have a better retirement standard of living. The good news is that policymakers have a variety of instruments at their disposal to help reroute the course without unnecessarily burdening any one stakeholder group.