If a new bill recently introduced to Congress gains approval, beneficiaries of Social Security could receive an annual benefit increase of up to $2,400. This is something that senior citizens no doubt would undoubtedly welcome as rising inflation nullifies their annual cost-of-living increases.
According to CBS News, on June 9, United States Representative Peter DeFazio (D) of Oregon and Senator Bernie Sanders (I) of Vermont proposed the Social Security Expansion Act. Everyone already receiving Social Security benefits or reaching 62 in 2023 would be eligible to earn an additional $200 in their checks every month if the measure becomes law.
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In addition, it takes place amid a period of historically high inflation, which has a disproportionately large influence on older people living on fixed incomes, many of whom depend entirely on payments from Social Security.
The Social Security Administration (SSA) determined this year’s cost-of-living adjustment (COLA) to be 5.9 percent based on the inflation rates from 2021. Since that time, however, inflation has reached much beyond 8 percent, meaning that people who receive Social Security now see their benefits reduced.
By increasing the amount of money sent to each beneficiary every month, the new legislation hopes to relieve some of the monetary pressure. Because the typical amount received from Social Security each month is around $1,658, an increase of $200 would result in a 12 percent pay raise.
According to Martha Shedden, president of the National Association of Registered Social Security Analysts, many seniors rely on Social Security for the bulk of their income. An additional $200 per month may make a difference for many individuals.
The proposed legislation would, among other things, increase the monthly payout amount and make various other modifications to the program itself. The Consumer Price Index for the Elderly (CPI-E) might be used instead of the Consumer Price Index for Urban Wage Earners and Clerical Workers as the basis for calculating the yearly cost-of-living adjustment (COLA) (CPI-W).
A further modification would involve adding additional money by imposing the Social Security payroll tax on any income over $250,000. At this time, earnings greater than $147,000 are exempt from the Social Security tax.
Even if Congress does not approve the plan in its current iteration, commentators anticipate that Social Security will undergo some modifications to meet the requirements of beneficiaries long into the foreseeable future. So, it was all about the new bill passed for an additional $2,400 as a social security benefit for older citizens.
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Todd Carmack grew up in Dubuque, Iowa, where he learned the concepts of hard work and the value of a dollar. Todd spent years in Boy Scouts and achieved the honor of Eagle Scout. Todd graduated from Iowa State University, moved to Chicago, spent a few years managing restaurants, and started working in financial services and insurance, helping families prepare for the high cost of college for their children. After spending years in the insurance industry, Todd moved to Arizona and started working with Federal Employees, offing education and options on their benefits. Becoming a Financial Advisor / Fiduciary can help people properly plan for the future. Todd also enjoys cooking and traveling in his free time.
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