See How Changing the Language Social Security Uses Could Create Bigger Benefits
When it comes to Social Security, not everyone understands that the longer you wait to file, the bigger your benefits. A bipartisan group of senators think it’s time the Social Security Administration changes its language to make this fact clearer. According to CNBC, U.S. Senators Bill Cassidy (R-La.), Chris Coons (D-Del.), Susan Collins (R-Maine), and Tim Kaine (D-Va.), are proposing changes to help encourage retirees to wait. They believe that more often than not, people are claiming Social Security too early and not maximizing their income during retirement.
New Language
Right now, Social Security beneficiaries are entitled to full benefits once they reach their full retirement age. That’s either 66 or 67, depending on their date of birth. For each year delayed past full retirement age, up to 70 years old, 8 percent is added to Social Security benefits. So, you can see, it pays to hold off if you can.
Despite that fact, 62 is the most frequent age to claim Social Security, with almost 35 percent of men and 40 percent of women filing then. The senators say this results in an average lifetime benefits loss of $111,000 per household.
The senators want to make sure everyone understands the full impact of their decision. They would like Social Security to adopt new terms to better convey the advantages of waiting to claim benefits.
Under their plan, age 62, which is currently called “early eligibility age,” would be changed to “minimum benefit age.” Ages 66 to 67, currently referred to as “full retirement age,” would be changed to “standard benefit age.” And age 70 would be called the “maximum benefit age.”
If the legislation passes, the Social Security Administration’s educational and informational materials would be revised to reflect the new language.
Another Call for Bigger Benefits
The Seniors Trust also wants to see retirees receive the bigger Social Security benefits. That’s why we support the Social Security Expansion Act. If passed, this landmark piece of legislation will make four major changes to Social Security for retirees:
• Benefits will be increased for most recipients by about $200 per month — that’s $2,400 each year!
• The Consumer Price Index for the Elderly (CPI-E) will be used to calculate Social Security Cost-of-Living Adjustments (COLAs) instead of the Consumer Price Index for Urban Wage Earners (CPI-W) used currently. The CPI-E takes the unique spending habits of seniors into account — particularly regarding the cost of healthcare — and offers a more realistic COLA for retirees.
• Increase minimum Social Security benefits to provide higher payments to seniors and greatly reduce senior poverty.
• Provide enhanced benefits would be set to greatly reduce senior poverty to guarantee the long-term solvency of the Social Security program.
We believe that all America’s seniors deserve a safe and secure retirement. That’s why we’re working hard to improve their financial well being by urging Congress to pass this important bill now.
