Here’s a Glimpse of What the Future Could Hold for Social Security
Social Security is not a stagnant program. In 2023, recipients will receive a big benefits boost thanks to an 8.7 percent cost-of-living adjustment (COLA). That could not come at a better time for the 70 percent of retirees receiving Social Security benefits each year who have been struggling with this year’s inflation. But, as The Motley Fool reports, some of the changes that could be coming might not be good news for Social Security recipients.
Trust Fund Troubles
Social Security is experiencing a budget shortfall because the number of people retiring is outpacing the number of people entering the workforce. This is creating a budget deficit. If nothing changes, it is predicted the Social Security trust fund could run dry by 2035. At that time, it will only be able to pay about 80 percent of benefits. This means Social Security recipients could see a 20 percent reduction in benefits in about 10 years.
Washington Weighs In
The best way to prevent that from happening would be for lawmakers in Washington to take action. Several possible solutions have been floated around, such as raising taxes for wealthy workers, increasing the payroll tax, raising the full retirement age, or reducing benefits for high income earners.
The Seniors Trust firmly believes the best option is for Congress to enact the Social Security Expansion Act. This landmark piece of legislation will create a strong and long-lasting trust fund.
Rather than instituting an across-the-board payroll tax increase to fill the coffers, this bill will require the wealthiest Americans to pay their fair share. This Social Security Expansion Act will lift the income tax cap, which currently stands at $147,000 — but jumps to $160,200 in 2023 — and subject all income above $250,000 to additional Social Security payroll tax. Under this bill, more than 93 percent of households would not see their taxes go up by one penny.
When passed, the Social Security Expansion Act will extend the solvency of the Social Security trust fund through 2096 — ensuring it can continue to pay benefits in full. So please join us in making our voices heard urging Congress to pass this crucial landmark legislation now!
