Get the news you need delivered right to you. In 2021, about one-fourth (25%) of new retired-worker beneficiaries were age 66; 18% were over the age of 66. Raising the retirement age would be highly controversial and Congress is not likely to do so anytime soon. And one item under discussion is raising the eligibility age for Social Security benefits for future retirees a politically fraught move that is more likely to enrage voters than it is to become law in the near term. Planning a fireworks display? One problem I have with the proposal is that it frames its reforms as a means of addressing future insolvency, but when you look at the details, it is more than that. The Most Important Social Security Table You'll Ever See. The current retirement age for Social Security is 67 years old for anyone who was born after 1960, according to amendments that were made to the program during Ronald Reagan's presidency. Get daily news, in-depth reporting and critical analysis from the journalists, activists and thinkers who are working to improve our world.. What to Do If You Can't Make Payments Now That Student Loan Forgiveness is Off The Table. So when the general cost of living goes up, as has been the case over the past few months, they tend to struggle. While getting more money is good for seniors, inflation is hurting them just as it's affcting their younger counterparts who are still working. Get matched with an Authorized Partner. The Most Important Social Security Table You'll Ever See. Raise Social Securitys full retirement age to 70. Lawmakers consider plan to raise Social Security's full retirement age to 70 Sens. If the fund failed to generate an 8% return, both the maximum taxable income and the payroll-tax rate would be increased to ensure Social Security stays solvent for another 75 years. A half-dozen senators are involved in the talks, led by Maine Independent Angus King, who caucuses with Democrats, and Sen. Bill Cassidy (R-La.). Down 41%, Should You Buy This Beaten-Down Growth Stock? Beneficiaries can opt for early retirement at age 62, but they will not receive full benefits until they turn 67, according to the Social Security Administration. Tiny COLAs have been hurting seniors for years and causing them to lose buying power. It might be that you're downsized out of a job or your health renders you unable to hold down a full-time job. Thank you, you have successfully subscribed to our newsletter! Making the world smarter, happier, and richer. If you look at the rolling 20-year average since 1929 of the stock market [the return] varies from 5.5% to 10.5%, but the average is 8.8%, Cassidy told HuffPost. Some equity component is a good idea, Munnell said. Despite 2023s big COLA, Social Security recipients still struggle to keep up. But if you only lived until age 78, you'd end up with about $26,000 less in Social Security income in your lifetime by virtue of signing up at age 70 versus 67. Republicans favorite solutions for Social Securitys financing challenges demand that beneficiaries themselves bear the burden.. The agency announced thatthe full retirement age has officially beenincreased to age 67. Data is a real-time snapshot *Data is delayed at least 15 minutes. Other options reportedly include tweaking a benefits formula that allows people with low incomes to collect a minimum threshold of benefits to instead take into account the amount of years worked, or expand the agencys ability to invest wealth into private stocks, rather than the current trust fund model. Our content is intended to be used for general information purposes only. This would mean raising the retirement age even higher than 70 if life expectancy increases. She has a masters degree in environmental studies. Perhaps the most salient point illustrating Republicans and conservatives disinterest in saving Social Security, however, is the fact that the other solution to Social Security solvency increasing the amount of money going in to the program, rather than decreasing the amount going out seems to be off the table for much of the party. At Age 62 3. Careful! While the Greenspan Commission put forth changes to restore the program's solvency in 1983, similar changes, such as raising the retirement age, would be inappropriate today, Altman contends. Student Loan Forgiveness Was Just Struck Down. Senators Cassidy and King have been working on a legislative solution which has been reported in the past. Join Over Half a Million Premium Members And Get More In-Depth Stock Guidance and Research, Motley Fool Issues Rare All In Buy Alert, Copyright, Trademark and Patent Information. But if you planned to save little for retirement and compensate with a higher monthly Social Security benefit by signing up at age 70, that may not work out so well if, come your 65th birthday, you're forced to claim Social Security and you don't have a healthy nest egg. Sens. Its a poor lever to use.. Other Republicans tacitly support the cuts. The idea of forming a commission to look at Social Security is not new. COLAs are based on third-quarter inflation data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Learn More. The Before coming toTruthout,Sharon had written stories forPacific Standard,The New Republic, and more. COLAs have been minimal over the past number of years. A bipartisan group that is led by two U.S. senators Angus King (I) and Bill Cassidy (R) is reportedly considering a plan that would gradually raise the retirement age under the Social Security program to 70 in order to keep the trust fund solvent, according to Semafor. [emailprotected] Although the final framework is still taking shape, there are no cuts for Americans currently receiving Social Security benefits in our plan. With tax season in full swing, the SSA also wants recipients to be aware that there are some new special tax credits that cango towards expenses. Seniors could soon see more money in their Social Security checks, Preparing your taxes online can lead to mistakes and surprise charges, Social Security recipients to get 5.9% more money in 2022, Social Security recipients projected to receive 6% increase next year, July Fourth fireworks may be adding to air pollution. This is an example of two leaders trying to find a solution to a clear and foreseeable danger. All Rights Reserved. Debate: Can Sen. Manchin Save Broken Social Security, Medicare Systems? The lawmakers claim that theyre looking at benefit cuts and reforms due to concern over the solvency of Social Security though Republicans have been clear that their intentions are to slash benefits and force people to depend on work to survive for even longer into old age. 3 min read Pekic / iStock.com Among the proposed changes to Social Security is to raise the full retirement age for recipients, which proponents Raising the retirement age is probably the most controversial idea under consideration and one that may be essential for Republicans. These are trying times, and we need to raise $12,000 to keep publishing our uncorrupted, uncensored journalism. Advocates for a bipartisan commission argue the approach may help smooth out the differences between the parties. Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. Part of those changes included a gradual increase of the full retirement age to 67 from 65. Were almost in our 60s, should we get long-term-care insurance. To make the world smarter, happier, and richer. Sens. The agency announced that the full retirement age has officially been Privatizing Social Security would disproportionately impact people of color and low-income earners, research shows. The full retirement age has already been raised from 65 to 67. Among options being considered are changing the way Social Security calculates monthly benefits to reflect the number of years spent working and paying into Social Security, rather than the existing formula that calculates benefits based on a workers average earnings over 35 years, according to a report by the news website Semafor, citing two people described as having been briefed on the plan. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. Let's say you're entitled to a monthly benefit of $2,000 at an FRA of 67. Staying at an Airbnb or Vrbo any time soon? Unsubscribe easily. The average energy bill will drop when Ofgem cuts its price cap on There's no "final age" by which to sign up, so you can file as late as you want. The purpose of COLAs is to help seniors retain their buying power when inflation strikes. Beginning in 2021, the amount of investment income an American can receive and still be eligible for the EITC increased to $10,000. Other Republicans have also called for commissions. Specifically, under the proposal, the full retirement age would climb at a rate of three months per year until it is increased by three years for those reaching age 62 in 2040.. You may still face big bills or have trouble making ends meet in retirement, wrote personal finance columnist and financial planner Liz Weston in 2021. That 'official' letter you got from Social Security? Why have COLAs been so minimal? (The values do not add up to 100% due to rounding.). Best Debt Consolidation Loans for Bad Credit, Personal Loans for 580 Credit Score or Lower, Personal Loans for 670 Credit Score or Lower. Despite providing essential services, wages and benefits for these workers lag far behind those of other city workers. Invest better with The Motley Fool. "[With] something as critical. Most proponents of a higher retirement age think the full retirement age should be gradually raised for people born after 1960 to 68, 69 or 70. MarketWatchs Robert Schroeder contributed to this report. 5 Social Security Calculators to Share With Your Retirement Clients, New Bill Targets Social Security Work Disincentives for Disabled Americans, New Social Security Bill Boosts Survivors Benefit. Cost of living - latest updates: Huge drop in UK house prices predicted; energy bills to fall by hundreds tomorrow. The contents of this site may not be republished, reprinted, rewritten or recirculated without written permission. Site by, An aging population will challenge the U.S. economy: PBS, Expected retirement age, average savings have increased, study shows, More seniors, concerned about recession, move to sell homes: survey, More Americans fear going broke than dying: survey, Nearly 30% of households need to reassess retirement income needs, People want to retire early, but arent saving enough to do it: survey, Commentary: Why HECM Saver should be revived, Senior-held home equity falls to $11.62 trillion in Q1 2023, Programming Note: Happy Independence Day from RMD, Kristin Broadley on the reverse mortgage industrys potential, CFPB: A sharp increase for reverse mortgage complaints in 2022. Invest better with The Motley Fool. Greek Left Leaders Betrayed the Working Class. Copyright 2023 Consumers Unified, LLC DBA ConsumerAffairs. The problem, however, is that the CPI-W isn't reflective of the expenses that cost seniors the most. Opinion: Whats behind Bernie Sanders and Elizabeth Warrens bold tax hike to shore up Social Security? Do you have information you want to share with HuffPost? You can also delay your Social Security filing past FRA for a higher monthly benefit. As such, while it's okay to celebrate a larger COLA in 2022, seniors will also need to prepare to manage that money wisely and stretch it as far as possible. The group is formulating a bill to slash Social Security, and raising the Social Security retirement age to 70 is a serious consideration. The purported plan also includes a proposed sovereign-wealth fund that could be funded with $1.5 trillion or more in borrowed money, according to Semafor. (Hes also been a hearing aid user for over 15 years.) As noted on the groups website, nearly 75% of current House Republicans are members of the Republican Study Committee. Conservatives Won a Landslide. Listen to free podcasts to get the info you need to solve business challenges! But the program may come under scrutiny as Congress continues to reevaluate federal spending. The case could threaten not only the existence of the CFPB, but also programs like Medicare. Indeed, many will receive additional benefits, Cassidy and King spokesmen said in a joint statement provided to MarketWatch. The plan is not finalized, representatives for Cassidy and King said in the email. More from Personal Finance:Retirees' biggest fear is outliving their assets, research findsSocial Security may be key issue for GOP presidential rivalsThis tool lets you play at fixing Social Security woes. Were counting on you to support our work in this critical moment. While the Consumer Financial Protection Bureau (CFPB) has warned in the past that using this tactic could be expensive, commentators have said that home equity could be a viable path toward maximizing the programs benefits. The latest development comes as President Joe Biden has repeatedly accused Republicans of seeking to cut Medicare and Social Security benefits, hoping to use that stance as fodder in the 2024 election cycle. 2023 ALM Global, LLC, All Rights Reserved. When President Joe Biden mentioned GOP plans to cut Social Security and Medicare in his State of the Union address, Republicans responded with jeers and outrage. She can be found on Twitter: @zhang_sharon. Alicia Munnell, director of the Center for Retirement Research at Boston College, said raising the full retirement age for Social Security should be viewed as a benefit cut. House GOP Budget Framework Sets 70 as Full Social Security Claiming Age, Retirement Planning > Social Security > Social Security Funding, News As first reported by Semafor, the group is led by Senators Bill Cassidy (R-Louisiana) and Angus King (Maine), an independent who aligns himself with Senate Democrats. Image source: Getty Images. In 1983, a commission led by Alan Greenspan, who would later serve as Federal Reserve chairman, issued a report that served as a basis for Social Security legislation. All rights reserved. A final plan has not yet been approved by the senators, and its not yet clear what solutions it may include. Mar. Global Business and Financial News, Stock Quotes, and Market Data and Analysis. The Biden administration has a new strategy for student-loan forgiveness but there are risks it could meet the same fate, Fox News said to have settled with Tucker Carlson producer for $12 million, Nasdaq posts best first half since 1983 as inflation data power Friday stock surge, Use your mortgage statement to cut your tax bill, A breakfast-cereal giants grumbles about prices could be music to the Feds ears. CORRECTION: An earlier version of this story incorrectly said Wyden was part of the bipartisan talks. As of this year, only a workers first $160,200 in earnings are subject to the 12.4% tax shared by workers and employers. Among options being considered are changing the way Social Security calculates monthly benefits to reflect the number of years spent working and paying into Social Security, rather than the existing formula that calculates benefits, Article Attribution | Read More at Article Source. Looking forward, Richtman said, it is very likely that House Republicans, who will be in the majority next year, will use the GOP Study Committees blueprint as a roadmap for potential cuts to Social Security during debt ceiling negotiations including raising the full retirement age. The median balance owed was $77,000.. While 22% supported it, 7% said they didn't know. Research has found that raising the retirement age to 70 would cut monthly Social Security payments for early retirees by about 15 percent. Some lawmakers have called for increasing the Social Security retirement age in response to the In a bipartisan reform Congress Many American seniors are dependent on Social Security benefits, and they often interact with the reverse mortgage business as a result. Wages captured by Social Security taxes hit a record low in 2021 due to increasing inequality, a new analysis finds. The monthly Social Security benefit seniors start out collecting isn't the exact benefit they're stuck with for life. Year of Birth 1. The Social Security Administration (SSA) says it has good and bad news for consumers to start 2022. Maine Independent Sen. Angus King and Sen. Bill Cassidy, a Republican from Louisiana, are leading a group of lawmakers in a proposal to raise the full retirement age to This year, inflation has been hitting a lot of people's wallets as the demand for consumer goods has increased and supply chains have been slow to catch up. A group of Republican senators, plus one independent who caucuses with Democrats, is working on a plan to slash Social Security benefits by potentially raising the age at which people receive full benefits by several years which would essentially force millions of workers to work even longer than into typical retirement age. Get the news you want, delivered to your inbox every day. A Division of NBCUniversal. When the index indicates that the cost of common goods is rising, Social Security benefits get a boost. Request academic re-use from While we don't yet have third-quarter data from the CPI-W, based on recent months' data, it's fair to assume that next year's Social Security COLA will, in fact, be substantial. Washington lawmakers avoided touching Social Security when they crafted the recent bipartisan compromise to raise the debt ceiling. What if Social Security Went Bust and Kept Paying Full Benefits? If you don't live a very long life, you might end up shorting yourself on income by claiming Social Security at 70. "You can just simply increase payroll taxes, but politically that will not fly," Hoagland said. It's "insider Washington understanding" that benefit cuts have to be on the table, she said. A bipartisan group that is led by two U.S. senators Angus King (I) and Bill Cassidy (R) is reportedly considering a plan that would Raising the payroll taxes to apply to higher earnings above the current $160,200 cap is popular, Hoagland said. The only catch is thata person must qualify and file a federal tax return to claim the EITC. Well start sending you the news you need delivered straight to you. Further, party leaders, such as current House GOP leader Kevin McCarthy, have promised to foment a debt ceiling crisis in order to extract concessions from Democrats, including Social Security cuts, Richtman said. While Republicans have proposed forming a bipartisan commission to look at the issue, some worry that may lead to benefit cuts. At every turn, Sanders said, Amazon makes decisions that actively harm workers in the name of its bottom line.. Does Paying Off Student Loans Early Make Sense? As Richtman noted, during the midterm campaign, Rep. Steve Scalise, the third-ranking Republican in the House, said he approved of the Republican Study Committee plan. As Richtman noted, Congressional Democrats have introduced legislation that would extend the solvency of the Social Security trust fund by asking high earners to begin paying more into the system, without benefit cuts. The coming year, however, is shaping up to be different. Jessica Hall is a retirement reporter for MarketWatch. Copyright 2023 MarketWatch, Inc. All rights reserved. A spouses benefit wouldalso bereduced by 35%. Other provisions address programs such as Medicare and federal disability insurance. The biggest of those is the Child Tax Credit (CTC), which was expanded last year to help families that are raising children. . But what if you end up having to leave the workforce at a younger age? Benefit cuts such as reducing the amount wealthy beneficiaries receive likely will be considered, he said. Anything that involves raising the retirement age is a benefit cut, and its particularly pernicious because it hurts the vulnerable, Munnell said. You are also agreeing to our Terms of Service and Privacy Policy. But doing so could be risky in two regards. But doing so could be risky in two regards. If consumers begin withdrawing benefitsmore than three years (or 36 months) before full retirement age, then benefits are reduced by 5/12 of one percent (or 1/240) each month. This is an example of two leaders trying to find a solution to a clear and foreseeable danger, the senators spokespeople told Semafor in a statement. A new commission could be structured in a way that allows for the consideration of amendments after a it comes up with a proposal. Dont forget you can visit MyAlerts to manage your alerts at any time. We have hours left to raise the $12,000 we still need to keep Truthout whole. Heres how. If a spouse was receiving $500 per month,then they would get$325 per month going forward. Failure to generate a return of 8% would cause both maximum taxable income and the payroll tax rate to increase, which would aim to put the Social Security trust fund on solvent ground for the next 75 years. Raising the retirement age is a way to soften the immediate impact. Elizabeth Warren, a Massachusetts Democrat, and Bernie Sanders, a Vermont independent who like King caucuses with the Democrats, seeks to shore up Social Security by raising the top rate of income tax by a third, and the top rate of capital-gains tax by more than a half. The reverse mortgage industry has long contended that using the product could be a way for more seniors to delay taking Social Security until the maximum benefit kicks in, currently at age 70. As the right-wing fervor grows, can you help us defend truthful information and uplift the stories of movements for justice? Share & Print. But, in reality, many Republican politicians and members of Congress have been pushing for cuts. Think about someone who's been on Social Security since 1991. Key Points Social Security reached the 87th anniversary of the programs enactment this month. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. To make things simpler, the SSA has prepared a benefits planner that includes a chart on retirement ages. I think thats part of the attractiveness in getting both sides to come together, which is in order to make sure that we save these programs forever, you have to recognize that life expectancy is a lot more today than it was when Social Security was established, Romney said. I also take issue with the part of the proposal that suggests people could just go into the market and buy private income insurance.. You may be planning to file for Social Security at age 70 to snag the highest monthly benefit possible. Join Over Half a Million Premium Members And Get More In-Depth Stock Guidance and Research, Motley Fool Issues Rare All In Buy Alert, Copyright, Trademark and Patent Information. In the end, Altman said, it will be up to voters to decide what approach they prefer. Your article was successfully shared with the contacts you provided. Professionals rely on HW Media for breaking news, reporting, and industry data and rankings. But now that you've made it to the finish line, there's no reward for waiting any longer. Filing for Social Security at 70 will result in a higher monthly benefit. Signing up for Social Security at 70 means locking in a higher monthly benefit. FRA is 67 if you were born in 1960 or later. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Historic levels of inflation are also adding to the complexity, as the past two years have seen historic increases in the programs cost of living adjustment (COLA) to account for higher living costs. This means that those with an income of $1 million a year stop paying into the program by the end of February the day of this storys publication unlike the vast majority of Americans, who pay into the program with every paycheck all year. Visit a quote page and your recently viewed tickers will be displayed here. You can visit ChildTaxCredit.gov for options to file a federal tax return for free. You may be planning to file for Social Security at age 70 to snag the highest monthly benefit possible. The last time Congress changed the full retirement age was in 1983, a move that came on the heels of life expectancy increasing and health improvements being made for older Americans. To make the world smarter, happier, and richer. March 7, 2023, 12:33 pm By Chris Clow. Featured content providers include Reuters, Metacafe, News Corporation, About, BBC and The Sun. While the recent surge in consumer prices will hopefully be temporary in nature, some experts warn that we could be looking at higher living costs for a solid eight to 10 months. They reflect an ongoing political debate, driven mostly by Republicans, over long-term federal spending. To be sure, it remains to be seen what recommendations would come out of any commissions yet to be formed. In January, Reps. Tom Cole, R-Okla., and Jake LaTurner, R-Kan., reintroduced a bill titled the Bipartisan Social Security Commission Act that calls for the formation of a bipartisan commission that would provide recommendations for improving the program. The cost of medical care has risen substantially over the years, and it's also something seniors are likely to spend a large chunk of their income on. The reason for the push? Additionally, the senators are eyeing a change to the programs formula that calculates monthly benefits, transforming it from a system that disburses funds based on ones average earnings to base rewards on how many years the applicant made Social Security payments throughout his or her career instead. The RSC said its proposal would balance the federal budget in seven years by cutting some $16 trillion in But what the actuaries did not anticipate then is the wealth and income inequality that would follow in the late 1980s and '90s. benefits at age 70 results in a 24% benefit increase. HW Media connects and informs decision makers across the housing economy. As the U.S. population grows older at a faster rate, a panel of experts examine the potential implications on the nations economy. Nevertheless, the senators are talking to each other about changes to the way Social Security benefits are calculated, plus increasing the amount of payroll income that is subject to the taxes that fund benefits. That's something Social Security beneficiaries need to gear up for -- no matter how generous their raise is next year. Social Security benefits are subject to annual raises known as COLAs. Help us get essential knowledge into a world that needs revolution and healing make a tax-deductible donation today! Reverse Mortgage Daily (RMD) is the leading source for news and information covering the reverse mortgage industry. The only difference is that many seniors are on more of a fixed income and have only their Social Security benefits to pay their living expenses. 1. Image source: Getty Images. Such extreme investor rights under an international trade agreement directly oppose Honduran sovereignty, says critic.
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