You’ve read the headlines: Social Security is Going Broke. While that is NOT entirely true, the Social Security Trust Fund is being depleted faster than expected. If nothing changes, the agency’s latest report predicts benefits may need to be cut – by about twenty percent – starting in 2033.
A Fox Business report explains that Social Security will not run out of money because it is continually generating new revenue collected through payroll taxes. So, as long as people are working and paying taxes, Social Security is being funded. But, there is still reason to be concerned.
Social Security is Struggling
The problem is the agency is not collecting enough revenue to keep up with the promised payouts. One issue is the aging population. Baby Boomers – once the largest living generation – are now entering retirement. Couple that with the increased life expectancy and it’s easy to see that more money will be coming out than going into the Social Security system.
The other concern is COVID-19. Unemployment reached record highs last year due to the pandemic. With so many Americans out of work, income tax collection declined drastically, and Social Security lost a significant amount of its tax revenue funding.
Congress Can Help
Lawmakers are now scrambling to come up with plans to shore up Social Security. Rep. John Larson recently introduced Social Security 2100: A Sacred Trust. It calls for building the coffers by increasing the tax limit subject to Social Security to $400,000 from about $142,800 today.
The Seniors Trust believes that’s a good start but much more needs to be done. We support the Social Security Expansion Act. When passed, this legislation will make four major changes to Social Security for retirees:
- Benefits will be increased for most recipients by about $65 per month.
- 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 need your help! Please sign our petition to Congress and tell lawmakers the time to act is now – they must pass the Social Security Expansion Act.