Amidst claims that the system is going broke, the Vice Presidential candidates were pressed to give their views on how to ensure the lifespan of Medicare and Social Security and, as expected, sparks ensued.
During the debate, Congressman Ryan referred to Medicare as a “piggy-bank for ObamaCare”, with Vice President Biden countering that funding would not come from cuts to Medicare, but from increased payments from healthcare companies.
Tax increases proposed by Democrats include a nine percent Medicare tax hike and an additional 3.8 percentage tax on unearned income for high-income earners, a levy which has become the center of the debate. This tax is in addition to regular income taxes and refers to net investment income for the year. Conversely, Republican Presidential candidate Mitt Romney’s plans for the future of many of America’s entitlements include gradually increasing the retirement age to match the growth rate of benefits. Democrats argue that this approach could bankrupt senior citizens.
As such, senior citizens are especially concerned with how Medicare benefits and funding will be affected by the Patient Protection and Affordable Care Act (aka ‘ObamaCare’). Individual investors are also asking how they will be affected and are turning to their financial advisors for guidance. Rather than waiting for the dust to settle, advisors should be proactive in communicating how potential tax increases or cuts will affect their clients.
While a resolution won’t come until after the election, financial advisors, like the Presidential candidates themselves, have a great opportunity to harness the power of social media and reach out to the late boomers planning for retirement and offer advice on how their financial decisions might be impacted by changes to entitlement programs such as Medicare, which will be significant regardless of the outcome of the elections.
As we noted recently, social media is again proving a key battleground for the elections. Both Vice President Biden and Congressman Ryan have been engaging voters through Twitter and Facebook, as well as allowing their campaigns to tweet during the live debates. Congressman Ryan recently used his Twitter account to send out a press release with the findings from the Trustees of Medicare and Social Security. Post-debate, both Presidential and Vice Presidential candidates tweeted about their performances.
Interestingly, while the first debate was the most-tweeted-about event in American political history, the second was less Twitter and more Facebook. Nevertheless, the influence of social media should not be underestimated.