Raising The Age For Social Security Will Mean Massive Impact
Raising the age for social security will mean massive impact for the growing demographic of those who rely on assistance.
House Republicans unveiled a plan last week that calls for raising the Social Security retirement age, reports CNBC.
“Both Social Security and Medicare face looming insolvency dates, while the number of seniors who rely on those programs is projected to grow.”
Republicans’ budget proposal calls for “modest adjustments” to the retirement age to reflect longer life expectancies, though it did not specify how high the age could go up.
Social Security’s full retirement age — when beneficiaries may receive 100% of the benefits they’ve earned — is currently 67 for people born in 1960 or later.
The plan also calls for reducing full retirement age benefits for high-income earners, while also limiting and phasing out “auxiliary benefits” for those beneficiaries’ spouses and dependents.
The budget did not specify the income thresholds to which those changes would apply.
“There is a lot of willingness and openness on the Republican side of the aisle to reduce Social Security benefits for high earners,” said Emerson Sprick, associate director of economic policy at the Bipartisan Policy Center.
The Republican Study Committee budget calls for “Making Social Security Solvent Again.”
The reforms would be gradually phased in and “affect no senior in or near retirement,” according to the plan.
Ultimately, the goal for the changes is to make Social Security’s retirement trust fund “sustainably solvent.”
The Republican budget proposal would restructure Medicare so beneficiaries receive premium support subsidies, which they may use to pay for either through federal traditional Medicare or private Medicare Advantage plans.
The amount of the subsidies would be based on a benchmark that would be chosen after testing several options, according to the plan.
To help shore up Social Security’s shortfall, Biden’s budget calls for the “highest-income Americans to pay their fair share.”
“Under my plan nobody earning less than $400,000 will pay an additional penny in federal taxes,” Biden said during his State of the Union address earlier this month.
The president’s budget proposal also calls for improving Social Security and Supplemental Security Income benefits for retirees and individuals with disabilities who “face the greatest challenges making ends meet.”
Biden’s budget also aims to shore up Medicare in keeping with changes he has previously proposed.
That includes raising the Medicare tax rate on both earned and unearned income from 3.8% to 5% for those earning more than $400,000.
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Also Read: Retirees Will Now Receive More Money For Social Security
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A new Social Security benefit will now save beneficiaries money by slashing the amount recipients have to pay back.
Social Security recipients will now have to pay back much less if they were inadvertently overpaid.
The Social Security Administration announced Friday that it will no longer automatically withhold 100% of the overpayment amount from recipients’ monthly benefits. Instead, it will collect 10% – or $10, whichever is greater – to recover the overpayment.
There will be limited exceptions, such as when an overpayment resulted from fraud.
“Social Security is taking a critically important step towards our goal of ensuring our overpayment policies are fair, equitable, and do not unduly harm anyone,” Social Security Commissioner Martin O’Malley said in a statement.
“It’s unconscionable that someone would find themselves facing homelessness or unable to pay bills, because Social Security withheld their entire payment for recovery of an overpayment.”
The change applies to new overpayments, but those already having more than 10% of their benefits withheld can contact the Social Security Administration to discuss reducing the rate.
Beneficiaries who would like a rate lower than 10% will be approved if the overpayment will be recovered within 60 months, rather than the former deadline of 36 months.
The Social Security Administration has been under fire lately for mistakenly overpaying beneficiaries and then clawing the money back.
Several news outlets have reported on the issue, and a House Ways and Means subcommittee held a hearing on it last fall.
“Improper payments, many of which occur by no fault of those who have been improperly paid, do in fact place a heavy burden on the recipients,” Georgia Rep. Drew Ferguson, a Republican who chairs the subcommittee, said in his opening statement at the hearing.
“That’s why we’ve got to do more to help prevent this before they happen.”
The majority of recipients who receive Social Security disability benefits and have earnings sufficient to affect their benefits receive an overpayment, according to a report published by the Government Accountability Office last fall.
The agency cited a 2019 study by the Social Security Administration and Mathematica, a research and consulting company, that found that overpayments typically lasted nine months and totaled nearly $9,300.
An average of roughly 72 million people received monthly payments from the Social Security Administration in fiscal year 2023, according to the agency’s latest financial report.
It distributed more than $1.4 trillion in benefits.
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Also Read: Retirees Will Now Receive More Money For Social Security
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