How Can Congress Boost Benefits If Social Security Is Running Out?

How Can Congress Boost Benefits If Social Security Is Running Out?

Mary Johnson, Editor

The question came between bites of Waldorf salad and barbecue at a recent church luncheon here in Barboursville, Virginia. How can Congress give people higher Cost-of-Living Adjustments (COLAs) and a benefit boost, if the program is running out of money? The majority of people attending were over the age of 62. Almost everyone there currently, or will at some point, depend on Social Security for the majority of their retirement income.

Before answering, let’s first take a look at whether current Social Security benefits provide adequate retirement income. Consider:

  • The average retirement benefit is about $1,225 a month or $14,700 a year. That’s just 25% above the federal poverty level.
  • People reaching age 65 have an average life expectancy of an additional 19.2 years, many live into their 90s.
  • Research reveals a significant decline in retirement preparedness. Up to 45% of households over 50 have insufficient savings to last through retirements as long as 30 years.

Now let’s talk about healthcare costs:

  • Medicare Part B, supplemental and Part D premiums alone often exceed more than $4,350 per year per beneficiary. In addition there are out-of-pocket costs that can add thousands more per year for deductibles, co-pays or coinsurance. Dental and vision benefits are not covered under original Medicare.
  • According to TSCL’s 2015 Senior Survey 58% of respondents said they spent up to one-third of their Social Security benefits on Medicare costs. Another 18% of respondents spent up to one half of their Social security on Medicare costs.
  • Total out-of-pocket healthcare costs increase as people get older and health worsens and taking an increasing share of Social Security benefits because medical costs are growing far faster than overall inflation.

Some in Congress argue that Social Security is unsustainable as currently structured. They say that there are fewer workers paying taxes, and with people living longer, beneficiaries get more in benefits than they pay in. They say that benefit cuts must be made to bring the system back into balance.

TSCL and other senior advocates say that while there are fewer workers, about 6% of the nation’s wealthiest and highest wage earners are not paying their fair share into Social Security. Under current law workers pay taxes on Social Security up to $118,500. People with higher earnings pay nothing on amounts over that. If people paid Social Security taxes on all wages, that would not only provide years of solvency to the program but would also pay for a modest benefit boost and higher COLAs.

It’s up to us to let elected lawmakers know that we won’t accept Social Security benefit cuts to fix the program when there are other means to keep the solvent for another 50 years. Make sure your voter registration is up to date and share this article with others!