“Expand Social Security”
That phrase creates great expectation for some people. You may be disappointed.
Under a bill being considered in congress (Social Security 2100) that “expand“ for current beneficiaries would be 2% or $29.22 per month on average. The 2019 COLA was 2.8%
The point at which Social Security benefits would be subject to income tax would be raised and indexed.
A new prospective minimum benefit would also apply. In 2019 that would be $1,264.58 per month or 125% of the poverty level, that too would be indexed. That amount is $15,174.96 per year. Is that a livable wage as Sen Sanders would put it? Raising the minimum wage to $15.00 an hour is equal to an annual income of $31,200.
The average Social Security benefit in 2019 is $1,461 for retired workers.
The COLA measure would be changed to the CPI-E which in theory reflects the spending of senior Americans, but would not guarantee a higher COLA. Over many years the net difference in the CPI-W and the CPI-E 0.39%
Also, according to the BLS
Although the CPI-E generally outpaced the official measures of inflation over the 1983–2011 timeframe, recent trends show different results. From 2006 to 2011, both the all-items CPI-E and the CPI-U rose at an average annual rate of 2.3 percent, while the CPI-W increased 2.4 percent. This turnaround was caused primarily by changes in the relative inflation rates of medical care and shelter, compared with the overall inflation rate. Specifically, the gap between medical care inflation and overall inflation has generally fallen since 2005, and shelter inflation has been rising slightly more slowly than overall inflation over the 2006–2011 period.
Nothing being contemplated precludes the need for significant saving and income in addition to Social Security.
Categories: Social Security