Wouldn’t you like a guaranteed raise each year or a guaranteed increase in a pension or even your investments?
🏋️♀️More than 62 percent of retirees think that Social Security cost of living adjustments (COLA) need a guaranteed minimum, according to a new survey from The Senior Citizens League (TSCL).
The survey was was conducted from mid – January through April 20, 2021 and had 1,125 participants. According to TCSL, through the end of December 2020, inflation as measured by the CPI-W — the index used to calculate the annual COLA — was just 1.4% for the year. “But as of the end of March 2021, the CPI-W was more than 3 percent higher than this time a year ago,” Johnson said.
The Senior Citizens League is working with members of Congress to introduce legislation that would strengthen Social Security benefits by tying the annual COLA to the Consumer Price Index for the Elderly (CPI-E), and by providing a guaranteed minimum COLA of no less than 3 percent.🏋️♀️
The above was reported on myfederalretirement.com
Using the Committee For a Responsible Federal Budgets Social Security Reformer tool which projects the impact on SS funding of various scenarios, we find that using the CPI-E increases the 75-year shortfall by 14%. Unfortunately the tool has no option for a guaranteed 3% COLA.
I hardly think strengthen is the appropriate word to explain changes that weaken the solvency of the program.
Dick, no problem. We can guarantee a 3% per year increase minimum. There are two readily available options to finance this improvement:
– A la the Medicare Catastrophic Coverage Act of 1988, raise taxes on retirees by lowering the thresholds for excluding social security from taxation – down to say the national poverty level.
– A la Health Reform (and predecessor legislation), we can add a tax surcharge to finance Social Security benefits like we already have on Medicare Part A (3.8% on income over the dollar threshold) and Part B and Part D (IRMAA)..
Any retiree who supports raising taxes to fund such a new guarantee should be afforded the privilege of stepping up first – they should be solicited to vote with their pocketbooks and pass along revenue to Treasury earmarked for that purpose. Assuming we don’t get enough takers, Congress can do what it did with the Medicare Catastrophic Coverage Act once retirees found out that they , themselves would have to fund the new entitlement – reverse and eliminate it. .
Wonder how many will sign up for this, how many will write their Congressional representative.
FYI = .H.R.2954 – Securing a Strong Retirement Act of 2021 – passed the Ways and Means Committee yesterday.
The original bill would have changed the RMD to age 75 for everyone at the same time. But now this new version of the bill has been amended to **stair step gradually over time** to age 75, and the initial step is age 73. Personally I hate that amendment and have called my congressman about it. Link to bill below – the RMD language is in SEC 105