As an overhaul of the Social Security program takes center stage during the second term of the Bush administration, the American Institute of CPAs has released a comprehensive analysis of factors that should be considered in a reform strategy. The institute said that the catalyst for the report -- developed by economic, tax and accounting experts -- was the Social Security Administration's estimate that the Social Security Trust Fund balance will peak in 2028 and be exhausted by 2041. Benefits would then be limited to the then-current cash flow into the system. Current actuarial calculations indicate that the trust fund will need an additional $3.5 trillion to pay anticipated future benefits over the next 75 years. "The debate surrounding Social Security reform brings to the forefront philosophical differences, varying opinions, and the age-old trade-offs between fairness, simplicity, economic growth and social policy. We at the AICPA strongly urge policymakers and the public to thoroughly understand the issues surrounding Social Security reform before taking a position," said the AICPA's vice president of taxation, Tom Ochsenschlager. The report, available online at www.aicpa.org/members/socsec.htm, addresses the pros and cons of such issues as: _ The current financial condition of Social Security; _ The relationship between Social Security and the elderly living in poverty; _ The redistribution of income inherent in the current system and how changes might affect that in the future; _ How changes to the current system might affect decisions about when to retire, the amount of work performed in retirement and personal savings rates; _ The tradeoff between additional risk and higher rates of return; and, _ Potential issues related to transition funding.
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