COLA Social Security update — Increased payments from $1,827 to $4,555 dropping in days – see exact dat… – The US Sun

Why you should retire at 70

Waiting to retire at 70 before claiming Social Security benefits gives you more for not retiring at 62.

If you claim at 62, you could see your benefits reduced as much as 30 percent, according to the Social Security Administration.

If you wait until your full retirement age, you’ll get 100 percent of your monthly benefit.

Ways to save Social Security, conclusion

If Social Security benefits were reduced for those with higher incomes, around 11 percent of the budgetary shortfall for the program would be saved.

This is true if the program lowered benefits for those with an income in the top 20 percent specifically.

To date, more than 80 percent of Americans are in favor of this option, which could help preserve the Social Security program for more Americans in the years to come.

Ways to save Social Security, part three

A clear option to help save the Social Security is to raise the retirement age, but this strategy is often fiercely debated.

Around 75 percent of both Republicans and Democrats are in favor of raising the retirement age so that Americans will continue seeing Social Security benefits in the decades to come.

Currently, workers can’t access full benefits until they reach their full retirement age of 67 (for those born in 1960 or later).

If the program slowly raised that age to 68 over the next 10 years, around 14 percent of the budgetary shortfall would be eliminated, according to the Motley Fool.

Ways to save Social Security, continued

Another option that’s been proposed to save Social Security is to apply the Social Security tax to more wages.

This is nearly universally supported by Americans, including 79 percent of Republicans and 88 percent of Democrats.

Because the payroll tax currently only applies to workers’ first $160,200 in earnings, there would be room for more money to go to the program if the cap was expanded.

If all wages over $400,000 were taxed, 61 percent of the budgetary shortfall would be gone, according to the Motley Fool.

Ways to save Social Security

As Republicans and Democrats fight over the future of Social Security, many different solutions have been proposed to the looming budgetary crisis for the program.

One option is to increase the Social Security payroll tax.

According to the University of Maryland, raising the tax rate to 6.5 percent for both employers and employees alike could get rid of 16 percent of the current budget dilemma.

Overall, more than 70 percent of Americans are in favor of this option, including 70 percent of Americans and 78 percent of Democrats.

Currently, employers and employees contribute 6.2 percent of wages to the Social Security program.

2023’s COLA may affect inflation

The current 8.7 percent Social Security COLA has increased spending, which could make efforts to reduce inflation more difficult.

In the face of rising inflation, Peter C. Earle, an economist at the American Institute for Economic Research, recently observed, according to CNBC, that a more generous COLA—and equivalent changes to pensions—encourage people to revert to previous spending patterns.

That happens at a time when the Federal Reserve is attempting to contain inflation by boosting interest rates.

Experts predict smaller COLA for next year

The league claims that due to slowing inflation, the Social Security COLA for 2024 will probably be considerably less than this year’s 8.7 percent.

The Social Security Administration determines the yearly cost-of-living adjustment by comparing the average for the third quarter of the current year to the average for the third quarter of the preceding year to determine the percentage increase in the CPI-W.

Mary Johnson, Social Security and Medicare policy analyst at The Senior Citizens League said to CNBC that if there is a COLA in 2024, it means that inflation has increased.

She added that there may be a very small COLA if at all.

Johnson said: “If we get any [COLA] at all, it simply means that inflation is coming down slowly.”

Inflation has been difficult for retirees

Although Social Security benefits are indexed for inflation, there is a delay before the adjustments become effective.

Despite the 5.9 percent COLA adjustment for 2022, government inflation data indicated that costs increased more quickly for the majority of last year.

According to the institute, older generations cut back on their spending during the epidemic more than other generations did.

“What this cost-of-living increase has done is allowed them some breathing space to move their spending higher,” said David Tinsley, senior economist at the Bank of America Institute, per CNBC.

“But I don’t think anyone would pretend they aren’t facing quite a lot of pressure still.”

How to determine your full retirement age

Your FRA (full retirement age), which is sometimes called your normal retirement age, is the age you are eligible for full Social Security retirement benefits.

The year and month you reach your FRA depends on the year you were born.

Prior to 1983, no calculation was needed as the normal retirement age was age 65 across the board.

In 1983, Congress created a law to redefine FRA.

FRA now works on a sliding scale to adjust for the fact that people are living longer and generally healthier lives.

The current FRA increases a few months for each birth year, until hitting 67 for people born in 1960 and later. This change applies to everyone born in and after 1938

Federal taxes on SS

Although many states do not require you to pay tax on your Social Security benefits – you may have to on the federal level. 

This could depend on your provisional income, which includes adjusted gross income (AGI) combined with any non-taxable interest plus half of your Social Security benefits.

If provisional income exceeds $25,000, or $32,000 for married couples, you may be subject to taxes on up to 50 percent of your benefits.

Individuals with a provisional income of more than $34,000 and married couples with more than $44,000 could be subject to paying taxes on up to 85 percent of benefits.

Does Congress pay into Social Security?

Senators and members of the House of Representatives, as well as the president and vice president, federal judges, and other federal government officials and workers, are covered by the Social Security program.

They, like the great majority of Americans, pay Social Security taxes.

The 1935 Social Security Act exempted “services performed in the employ of the United States Government” from occupations whose workers paid into the system and received benefits, per AARP.

Senators and representatives were not required to pay Social Security taxes on their congressional salary, but they were required to do so on outside income such as speaking fees.

Reporting Social Security scams

If you suspect an email you got from the Social Security Administration may be fraudulent, you’re urged to avoid responding or clicking on any links in the message.

The SSA said you should report the email by forwarding it to the US Computer Emergency Readiness Team (US-CERT) at phishing-report@us-cert.gov.

Avoiding Social Security scams

The Social Security Administration said Americans can avoid fraudulent calls and internet “phishing” schemes by not revealing personal information, clicking malicious links, or opening suspicious attachments.

The agency said most emails from Social Security will come from a “.gov” email address.

If an email address does not end in “.gov”, use caution before opening attachments or clicking on pictures or links.

You can learn more about how to protect your personal information and online account on the administration’s security webpage.

Direct Express explained

Even if you don’t have a bank account, you may benefit from direct deposit with the Direct Express card, according to the SSA.

The Direct Express card is a prepaid debit card account that will securely hold your Social Security benefits when they are sent monthly.

Close to 90 percent of Americans stressed about inflation

According to an AARP survey, about 9 in 10 adults age 50 and older say they’re worried Social Security retirement benefits keeping up with inflation.

Those who aren’t receiving Social Security yet are the ones worried the most – 72 percent.

AARP CEO Jo Ann Jenkins said in a statement, “amid high inflation, the guaranteed benefits provided by Social Security are more crucial than ever, and this automatic adjustment helps ensure the benefit does not erode over time as prices rise.”

Seniors living in poverty

According to the Congressional Research Service, nearly five million Americans aged 65 and older lived in poverty in 2019.

With millions on a fixed income or living at or below the poverty level, the Senior Citizens League continues to push to get another stimulus check into the hands of seniors.

Delayed retirement credit explained, part two

You can begin to receive Social Security retirement benefits as early as age 62, but it will reduce your benefits by as much as 30 percent below what you would get if you waited to retire until your full retirement age.

If you wait until your full retirement age (66 for most people), you will be able to obtain your full benefits.

Delayed retirement credit explained

If you wait until age 70 to start achieving your benefits, the Social Security Administration will increase your benefit, since you gained delayed retirement credits.

The retirement benefits are then paid out until you die.

The age you begin receiving your retirement benefit affects how much your monthly benefits will be. 

1975 COLA provision

In 1975, Congress adopted a COLA provision that provided automatic yearly COLAs based on the annual increase in the CPI-W.

Prior to 1975, Congress enacted special legislation to boost Social Security payouts.

COLAs in 1975 were calculated using the rise in the CPI-W from the second to the first quarter of 1974.

They were based on increases in the CPI-W from the previous year’s first quarter to the current year’s first quarter from 1976 to 1983; since then, COLAs have been based on the CPI-W from the previous year’s third quarter to the current year’s third quarter.

States with the highest minimum wage

As the nation continues to deal with inflation, some states have increased the minimum wage to combat rising prices.

Washington, DC has the highest minimum wage coming in at $16.10 an hour.

Other states with high minimum wages:

Social Security broken down

The majority of Americans pay 6.2 percent of their salaries to the Social Security system, with employers matching that proportion, according to US News.

Self-employed people contribute 12.4 percent of their earnings to Social Security.

Workers who have contributed enough to the system can begin collecting retirement benefits at the age of 62 or older.

If you become handicapped, you may be eligible for benefits, and if you die, your family members may be entitled to survivor’s payments.

Beneficiaries most and least reliant on SS

SmartAsset, a financial technology firm located in New York City, has evaluated Social Security incomes for the 100 US cities with the largest population of people aged 65 and above.

This was done to evaluate where Social Security makes up the highest and lowest percentage of total retirement income, according to GoBankingRates.

The study looked at two variables from the Census Bureau’s 2020 5-year American Community Survey: average retirement income and average Social Security income.

What Social Security benefits are based on

The product of the COLA and the benefit amount raises a person’s Social Security retirement payment by about the same amount as the COLA, according to the Social Security Administration.

The accurate calculation, on the other hand, is more difficult.

A primary insurance amount, or PIA, is used to calculate each Social Security payout.

Through a benefit formula, the PIA is directly tied to the principal beneficiary’s wages.

The COLA increases the PIA, with the result being shortened to the next lower dime.

Shelter cap increase due to COLA

The shelter cap value increased by $11 for the continental states and DC, according to the USDA.

The shelter cap values for Alaska, Hawaii, Guam, and the US Virgins Islands also increased.

The homeless shelter deduction increased to $159.73 for the continental states, DC, Alaska, Hawaii, Guam, and the US Virgins Islands.

Veteran benefits

There are several overlooked ways veterans benefit from social security.

Sometimes these benefits amount to thousands each month.

The government also supports those wounded in action.

For example, Social Security benefits protect veterans when injuries prevent them from returning to active duty or performing other work. 

The Social Security Administration (SSA) groups these benefits into a category known as survivor benefits.