Big Boost for Seniors and Disabled: Social Security Benefits Set to Increase!

Boosting Social Security benefits is a proposal that would be warmly received by recipients. Approximately 70 million Americans depend on Social Security payments, with many relying on these funds to manage their monthly budgets. Consequently, an increase in these payments would undoubtedly be welcomed. Recent findings from a survey conducted by the National Academy of Social Insurance indicate support among two specific beneficiary groups for increased benefits.

Social Security: A Critical Support System for Americans

Social Security payments are crucial for many Americans. The average beneficiary receives just below $2,000 monthly, and for most, these funds cover over half of their monthly expenses, thus playing a vital role in preventing financial distress. According to a recent survey by the National Academy of Social Insurance, an increase in benefits could significantly aid recipients.

However, the proposal to enhance benefits for certain groups arises amidst concerns about the sustainability of the Social Security fund. Projections indicate that the fund could be depleted by 2033, potentially reducing payments by 21% unless legislative measures are taken to prolong the fund’s life. Current solutions include raising Social Security taxes or cutting benefits now.

Survey Supports Enhanced Benefits for Specific Groups

Despite worries about the fund’s future, the National Academy of Social Insurance survey reveals strong support for increasing benefits for:

• Caregiving credit for parents: There’s significant backing for a caregiving credit for those who pause their careers to care for children under six. Full-time caregivers often face reduced Social Security benefits due to breaks in their employment history, impacting mainly women, who frequently assume primary caregiving roles. If implemented, this credit would help ensure that primary caregivers do not suffer from reduced future Social Security earnings.
• Bridge benefit for older workers: There is also support for increasing benefits for older workers engaged in physically demanding jobs. Such jobs may force individuals to retire earlier than the full retirement age of 70, resulting in lower benefits since they do not delay claims until 70. A proposed bridge benefit could compensate for this early retirement, ensuring these workers do not receive less in benefits.

Potential Funding Solutions for Enhanced Benefits

Amid concerns about the fund’s longevity, survey respondents have proposed funding mechanisms for their recommendations. A significant 82% of participants support eliminating the payroll tax cap on earnings above $400,000 and suggest increasing the payroll tax rate from 6.2 percent to 7.2 percent for both employers and employees. This change would help sustain the fund while accommodating the proposed benefit increases for caregivers and those in physically demanding jobs.

In a discussion with Newsweek, Alex Beene, a financial literacy instructor at the University of Tennessee, remarked, “Over the past year, we’ve observed numerous promises by lawmakers to modify and enhance Social Security benefits. The prospect of extending benefits to those needing temporary childcare or those in physically demanding careers, which complicate their ability to work until traditional retirement ages, is indeed promising for those who would qualify.”