Good news for millions of Americans this week: if they fulfill the eligibility rules, they may begin receiving a new $25,000 benefit.
If Congress adopts it, Newsweek claims that high school graduates will gain from the Social Security program. Representative Dean Phillips of Minnesota introduced the American Dream Accounts Act in the House with the goal of creating an investment account through a Social Security Administration program for every child born in the country.
Approximately $5,000 would be deposited into an index fund, which would be available upon high school graduation or the receipt of a GED certificate or diploma.
A new Social Security benefit available to graduates in the United States, up to $25,000
The majority of Americans will have access to $25,000 upon maturity, according to the law, because by the time the money are available for use, they will have generated an approximate yearly rate of return of 10%.
In a statement, Representative Dean Philips stated that “realizing the potential of our great country requires equal opportunity to realize the American Dream.” Every youngster in America has the opportunity to develop and realize their full potential because of this legislation
Philips also emphasized that passing the American Dream Accounts Act is a great way to bet on American ideals of opportunity for all people and self-determination. Investing pays off.
Furthermore, the bill might make it easier for students to start a business, pay for school, or even put down a down payment on a home. It would also allow them to use a smartphone app to track the performance of their investment portfolios. It shouldn’t be reserved for the affluent and well-connected.
According to Jim Pugh, executive director of the Universal Income Project, by giving every child the opportunity to follow their aspirations, the American Dream Accounts Act will level the playing field for long-term prosperity.
In addition, the scheme would allow Peace Corps and AmeriCorps participants to receive a $10,000 extra payout.
Read Also: Social Security Alert: Second Round of $1,920 Payments Issued for October
The increased Social Security payment will give young people more money for investments
The bill highlights the value of financial knowledge and empowering young people to manage their own finances, according to University of Tennessee at Martin financial literacy lecturer Alex Beene.
Beene thinks that people are more likely to comprehend the advantages of investing for the future when they have their own money.
Finally, it is critical to emphasize that the fund that provides Social Security benefits to seniors and individuals with disabilities is currently projected to run out of money by the middle of the 1930s if Congress does not make reforms.
According to the most recent official projections, guaranteed payouts for Social Security are predicted to drop by over 20% after the principal trust fund, which supports benefit distribution, runs out either around 2033 or 2034.
A recent report by the Committee for a Responsible Federal Budget attempts to quantify the impending benefit loss.
The analysis found that if a typical dual-income couple retired when the trust fund was out, they would lose an average of $16,500 in payments per year.
The authors of the paper note that throughout their campaigns, former president Donald Trump and vice president Kamala Harris both pledged to “protect” Social Security.
But neither has offered a plan on how to achieve it. The nonpartisan advocacy group claims that Trump has suggested removing taxes from Social Security payouts, which would seriously worsen the financial problems facing the program.
Therefore, in order to guarantee that millions of Americans have a higher standard of living in retirement, politicians must address the program’s financial concerns in the upcoming years.
The good news is that legislators may help change the direction without unnecessarily burdening any particular stakeholder group because they have a number of tools at their disposal.
