The prospect of an increase in Social Security benefits would be a welcome improvement for the nearly 70 million Americans who live on these benefits for their daily expenses. Social Security is for many beneficiaries a source of fiscal survival, supporting at least 50% of their living expenses.
A new survey conducted by the National Academy of Social Insurance discovered widespread public support for increasing benefits for two groups in particular: caregivers and older workers with physically demanding jobs.
Although this increase would go a long way toward assisting those in need, it is of concern to the long-term viability of the Social Security fund, which is set to be exhausted by 2033 if nothing is done.
Social Security’s Role
With the median monthly Social Security payment only $2,000 shy of that amount, many beneficiaries rely on these amounts to get by. Since a majority of beneficiaries depend on these checks as their sole means of income, any adjustment upward in benefits would be a welcome respite.
But Social Security’s future is uncertain. Without reform, the retirement fund will be able to pay only 79% of promised benefits in 2033, according to projections. To fix this problem, lawmakers are exploring increasing taxes or modifying benefits.
Benefits
Strong public support exists despite worries about the fund’s long-term survivability, according to the survey, for two groups of people to increase Social Security benefits.
Caregiving Credit
One of the largest proposals is to create a caregiving credit for those who exit the workforce to care for children under the age of six.
- Caregivers now get reduced Social Security benefits because their earnings record is broken.
- This problem disproportionately hits women because mothers are more likely to be caregivers.
- A credit for caregiving would make sure that such persons do not miss out on future Social Security benefits even after leaving work.
Bridge Benefit
The other suggested reform targets older employees in labor-intensive jobs who tend to be pushed into premature retirement.
- Most of these employees cannot keep working up to age 70, thereby cutting their overall Social Security benefits.
- A bridge benefit would give further assistance so these employees do not experience financial loss due to premature retirement brought about by the physical nature of their work.
Fund These Proposals
One of the greatest difficulties of raising Social Security benefits is how to fund them. The poll discovered that there was great support for two key solutions to financing.
| Proposed Funding Solution | Public Support |
|---|---|
| Removing the payroll tax cap on earnings above $400,000 | 82% support |
| Raising the payroll tax rate from 6.2% to 7.2% for employers and employees | Majority support |
If enacted, these reforms would not only prolong the life of the Social Security trust fund but also enable the benefits of caregivers and physically demanding workers to be raised.
Moving Toward
The proposal to expand Social Security benefits has attracted a lot of attention, with financial analysts and policymakers discussing how best to assist vulnerable beneficiaries.
As explained by Alex Beene, a financial literacy educator at the University of Tennessee, these proposals would bring much-needed relief to those with caregiving duties and physically demanding work.
Although no decision has been reached, the widespread public support for these changes indicates that Social Security reform is still a top priority for many Americans.
Final Thought
If you or someone you care about depends on Social Security benefits, it’s important to stay up to date on these possible increases. When news becomes public, beneficiaries can keep an eye on official Social Security Administration reports to see how the changes will affect their checks. Stay posted for more information as we near the official release!
FAQ’s
Why is the funding of Social Security an issue?
The trust fund is likely to be spent by 2033 without a change.
Who would gain from the Social Security raise?
Caregivers and older workers in labor-intensive occupations.
How might Social Security benefits be funded?
By abolishing the limit on payroll tax and modestly raising payroll tax.