Social Security Administration warned that Americans will stop receiving their full Social Security benefits in roughly 13 years without actions to shore up the program.
Seniors and other Social Security recipients, as all Americans, are being clobbered by four decades high inflation, which has outpaced increases in Social Security benefits this year.
Historically, Social Security recipients receive one cost-of-living adjustment, or COLA, each year, which is based on inflation and is supposed to keep their benefits in line with rising prices.
But this year, beneficiaries are seeing their purchasing power erode as inflation overtakes their latest COLA increase of 5.9%. Inflation in May rose 8.6% from a year ago, a four-decade high that pushed up the cost of food, shelter, transportation and energy.
Congressional lawmakers have proposed a new bill, The Social Security Expansion Act, which will boost Social Security payments by $2,400 per recipient annually, while also shoring up the program financially.
The new bill would seek to lessen the strain on people collecting Social Security by boosting each recipient’s monthly check by $200 — an annual increase of $2,400.
“With half of older Americans having no retirement savings, and millions living in poverty, it’s far past time to address the future of Social Security,” Rep. Steve Cohen, D.-Tennessee.
Anyone who is a current Social Security recipient or who will turn 62 in 2023 — the earliest age at which an individual can claim Social Security — would receive an extra $200 per monthly check.
Anyone who is a current Social Security recipient or who will turn 62 in 2023 — the earliest age at which an individual can claim Social Security — would receive an extra $200 per monthly check.
The bill would increase the Social Security payroll tax on higher-income workers.
Currently, workers pay the Social Security tax on their first $147,000 of earnings. Higher-income workers who make more than $147,000 annually don’t pay the Social Security tax on any earnings above that level.
Under the bill, the payroll tax would kick in again for people earning above $250,000. Only the top 7% of earners would see their taxes go up as a result.
References:
- Aimee Picchi, “Social Security bill would give seniors an extra $2,400 a year. Here’s how it would work”, MoneyWatch, June 16, 2022, https://www.cbsnews.com/news/social-security-benefits-inflation-extra-2400-a-year-social-security-expansion-act-retirement/