What are the proposed changes concerning Social Security benefits being considered by federal lawmakers?
Social Security benefits are a vital component of the retirement portfolio of millions of Americans. Accordingly, a Congressman from Florida recently requested a memo from the Congressional Research Service in order to determine whether America’s seniors are receiving adequate and fair benefits given the current economy and the amount they have paid in over the years. More specifically, the memo looked at the Cost of Living Adjustment (COLA) used in calculating benefits to evaluate whether it reflected an accurate financial picture in light of what it truly costs America’s seniors to live in today’s economy.
Historically, retirement benefits have been calculated using a figure known as the Consumer Price Index – Clerical Worker’s (CPI-W) as opposed to a separate figure known as the Consumer Price Index – Elderly (CPI-E). According to the research memo, seniors would reap greater benefits if the CPI-E were included in the calculation of the Social Security COLA as opposed to the CPI-W. This prompted the introduction of the “Seniors Deserve a Raise Act.”
The Act, which will be formally presented once Congress reconvenes, requests a 0.2% increase in benefits per recipient – a figure which more adequately reflects the actual costs of living for America’s seniors. Overall, the act requests $388 billion in additional funding for retirement benefit recipients, and, according to sponsor Congressman Grayson (FL), “protects the purchasing power of seniors’ earned benefits against inflation. The CPI-E does this while the CPI-W does not.”
The changes do not take into account the funding and payment issues affecting Social Security Disability, however. Over the past several years, more and more Americans have experienced debilitating accidents and injuries, requiring additional funds from the heavily burdened system. Hopefully, Congress will continue to consider options for increasing funding for both programs, ensuring that retirement and disability benefits will be available to all who are eligible.
If you are concerned about your Social Security benefits, please do not hesitate to contact the knowledgeable attorneys at Seelig Law Offices, LLC today. Serving the greater New York City metropolitan area, we can be reached at: 212-766-0600.