Everyone knows that this year, 2020, is being a chaotic and troubled one in history due to Covid-19. But in America, the elections are coming in just few days to decide the future of the USA, who will rule the country for its betterment. Undoubtedly, it has been seen that the government in the USA is following many strategies to boost up the economic growth of the country and to mitigate the loss made by corona virus crisis.
There is nothing new in saying that Social Security will be
going to turn out a hot issue in the debate of this year’s election in the USA,
as this program is currently dealing with an estimated $16.8 trillion funding
shortfall in the coming 75 years all because of the Covid-19 crisis.
Each and every candidate who is going to present in the
election this year for the betterment of America is showing their plans for
different programs running in the country. But there are chances too, where
people in America get mislead by the information about any program, especially
when we talk about Social Security.
Based on the reports, it has been shown that there may be a
great cut in the Social Security benefits in the next year and even in the
future as well. And most of the candidates are supporting this plan. Is it true
or not?
Let’s discuss the fact... there is some reality in the idea
that the support has given to cut Social Security benefits in the previous
time. It is not about reducing the percentage of Social Security monthly
benefits to more than 10 million beneficiaries. The primary idea behind this
plan is to decrease the benefits paid in the lifetime. Raising the full
retirement age is one of them, which would not alter a thing for recent
retirees or those employees who are just about to retire. But it would require the
upcoming generation of employees to make a hard decision. Possibly they have to
wait longer to get their full payouts for a month, or they may accept a steeper
decrease if they are going to claim early. Regardless of the thing whatever
they decide, there would be a decline in the amount paid in lifetime Social
Security benefits. On the overall, it has been deduced that it is going to cut
a Social Security benefit.
On the other side, it is also being reported that the
assistance given to implement such plans to cut SS benefits may be a sign of
fiction. Candidates are open to the idea of enhancing Social Security program
for beneficiaries’ sake. They are trying to cover the loopholes in the Social
Security benefits by focusing on gathering additional revenue and the Social
Security benefits for those recipients who are at greater risk due to any
health problem, Corona might be one of them.
A four-pronged
strategy
Everyone is trying to resolve the crisis in Social Security
because of corona virus outbreak in the country. There is a new strategy that
emphasizes on four different aspects that will determine the truth behind
cutting on the Social Security benefits in the coming year. Let’s go through
them:
1.Boost payroll
taxation on high payees
This year, all earned income including salary and wages that
may range from $0.01 to $137,700 is subject to a 12.4 percent payroll tax.
While on the other hand, if the earned income is above $137,700, then it is
exempted. As far as the latest proposal is concerned, a doughnut hole would be
made between 137,700 dollars and 400,000 dollars where income earned by an
employee would keep on exempt. In the case of earned money that is above $400,000,
the payroll tax will be applicable once again.
2.Increment in the
special minimum benefit
It is also rumored that there would be a great increase in
the special minimum benefit for those who are lifetime low-income earners that
may range from 10 to 30 years of employment history. Based on the proposal,
there would be a rise in the special minimum benefit to 125 percent of the
federal poverty line.
3.Life disbursements
for aged beneficiaries
Beneficiaries who live for a long time, they will be
entitled to get medical expenses and transportation charges. As they age, these
benefits can shoot up. According to the new Social Security plan, there may be a
call for an increment in the primary insurance amount or PIA up to 1 percent.
In this category, those beneficiaries will be involved who belong to the age
interval of 78 to 82 years and this PIA can be increased to 5%. It states that
this would show an unassertive pay hike for mature beneficiaries.
4.Adopting the CPI-E
from the CPI-W
Last but not least, another proposal is to switch the CPI-W
to the CPI-E. This might be a call for switching to the next inflationary chain
of Social Security. CPI-W or Consumer Price Index for Urban Wage Earners &
Clerical Workers would be swapped with the CPI-E or Consumer Price Index for
the Elderly. The reason is that CPI-W has a poor performance in tracking the
expenses that elderly citizens are opposing. The CPI-E involves an index, which
is accountable to track the expenditure of households with individuals who have
an age of 62 years or above this.
It can be seen that there is nothing in this plan that may
show, there would be a great reduction in the Social Security benefits or
expenditures in any manner.
Now, the reality is in front of you. If you are one of the American
citizens and saving for your retirement years in terms of Social Security
taxes, then it would be better if you pay as much as $16,728 every year, then
you will be going to see a great hike in your Social Security retirement income.
And of course, with this amount of benefit, one can easily live his/her
retirement years with complete peace of mind and satisfaction.
