Joe Biden has proposed what MSN terms a ” four-point agenda” to boost money and assist in addressing the $22.4T financing gap highlighted in this year’s Trustees Report as the Social Security Old Age and Survivors Insurance Trust (OASI) threatens depletion by 2033. If the government is unable to address the gap, retiree benefits might be reduced by at least 24% starting in 2033.
While a couple of Biden’s suggested changes will primarily impact high-scale earners and business executives, who have saved for retirement that are many times larger than those of the common American, others will have an impact on middle- and less wealthy wage earners, particularly those who eventually may depend on the benefits of social security.
Payroll Tax Implementation for Income Above $400K: Currently, a 12.4% tax is applied to any income earned that is less than $160,200. OASI taxes are not applied to earnings that are higher than that threshold. Biden wants to tax income earned over $400,000 while exempting earnings over $160k above $400,000.
Change the Method Used to Calculate COLA Increases: COLA, which is calculated annually based on inflation, is used to alter Social Security benefits. The government now determines COLA using the CPI-W. However, this figure may not accurately represent the costs and way of life of retirees.
Raising The Basic Insurance Limit For Social Security
The amount of Social Security payments you’ll get is determined by your AIME when you start claiming benefits, and the Primary Insurance Amount (PIA).
The Special Lifetime Benefit Of Low-Wage Laborers Should Be Increased: Regardless of the amount of money they gain while working, low-wage individuals are entitled to a particular minimum benefit. A lifelong low-earner’s yearly Social Security payments in 2023 would be just $12,502, or $1,033.50 every month. Biden wants to raise the benefit to over 126% of the individual federal poverty threshold.
