If a new plan recently submitted to Congress is passed, Social Security beneficiaries might get an extra $2,400 in payments each year.
Seniors would undoubtedly appreciate this since rising inflation has eliminated their yearly cost-of-living adjustments.
Social Security Expansion Act
US lawmakers submitted the Social Security Expansion Act on June 9. US Rep. Peter DeFazio (D-OR) and Sen. Bernie Sanders (I-VT). The plan would add $200 to each monthly payment for everyone receiving benefits now or who will reach 62 in 2023.
The bill is appropriate for a few reasons. First, if nothing is done to strengthen the program, Americans would stop getting their full payments in nearly 13 years, according to a Social Security Administration declaration made earlier this month.
Additionally, it occurs amid a time of historically high inflation, which has a significant impact on seniors living on fixed incomes—many of whom rely only on benefits—and is especially severe for them.
The 5.9% Cost-of-Living Adjustment (COLA) for Social Security this year is calculated using inflation data from 2021. However, since then, inflation has risen far beyond 8%, which means that Social Security beneficiaries today are really losing money.
By increasing each recipient’s monthly check, the new legislation seeks to reduce the burden on their finances. Given that the typical monthly Social Security benefit is $1,658, an increase of $200 would amount to a 12% increase.
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COLA Payments
The measure would increase the monthly payment in addition to altering the program in a number of ways. One would be to use the Consumer Price Index for the Elderly (CPI-E) rather than the Consumer Price Index for Urban Wage Earners and Clerical Workers as the basis for the yearly COLA.
Another adjustment would be to apply the Social Security payroll tax to all incomes over $250,000 in order to increase financing. Earnings now above $147,000 are exempt from the Social Security tax.
Observers anticipate that Social Security will undergo some sort of reform to guarantee that it continues to meet the demands of beneficiaries long after the measure in its current form is rejected by Congress.
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