Benefit Bulletin: May 2016

Benefit Bulletin: May 2016

7 Questions That Must Be Addressed About Social Security

Are benefit cuts inevitable when Social Security’s financing runs low in a few years? Your participation in this November’s presidential election will play a critical role in how this question will be answered.

7 crucial questions that TSCL believes must be addressed by the candidates about their plans to change Social Security:

Will current beneficiaries and those close to retirement — people age 55 and older— be protected from benefit cuts?    
People who are already retired, or close to it, aren’t able to make adjustments to retirement plans if benefits are abruptly cut.

Will Social Security benefits be increased fairly to provide adequate cost-of-living adjustments (COLAs)?
Currently, COLAs don’t keep up with typical retiree costs. Consequently, Social Security benefits have lost 22% of their buying power since 2000.

Will money borrowed from the Social Security Trust Funds be repaid in full?
The U.S. Treasury has borrowed $2.8 trillion from Social Security, but in recent years Congress has battled over the borrowing required to repay the Trust Fund. Some are calling instead for COLA and other “entitlement” cuts.

Will higher-income workers pay their fair share of taxes to Social Security?
While the majority of workers pay Social Security on 100% of their earnings, people who earn the most, more than $118,500 a year, pay NOTHING on earnings over that amount.

Will the program ban payment of benefits based on unauthorized earnings by undocumented immigrants under invalid Social Security Numbers?
Social Security currently determines initial retirement benefits based on all earnings, even when individuals were working without legal authorization under stolen or fake Social Security numbers.

Will Social Security be adjusted to provide greater financial security, especially for lower-income beneficiaries?
The average Social Security benefit today is only $1,240 a month. That’s only 25% above the federal poverty level. More than one -third of all recipients depend on Social Security for 90% of their retirement income.

Will income thresholds that subject Social Security benefits to taxation be adjusted so that fewer beneficiaries will be subject to taxes on their Social Security in the future?
Fifty-six percent of all Social Security households pay taxes on their benefits. Many of them have very modest middle incomes and didn’t adequately understand or plan for these taxes, which take about 6% on average of Social Security income.

As a non-partisan, non-profit seniors organization, TSCL does NOT endorse candidates in presidential or congressional races. Our mission is to educate the public about Social Security and Medicare benefits and about legislative proposals that would affect Americans’ retirement security. We urge you to make sure your voter registration and your photo ID’s are up–to–date, especially if you have moved recently. We encourage all of you to vote this November!