07 May Social Security: Benefits, Legislation, & What You Need To Know
While the United States is generally considered the most economically prosperous nation in the world, most people lack enough savings to cover their daily living expenses after retiring. They are therefore likely to be partially or completely reliant on the limited monthly payments they will receive through their Social Security retirement benefits.
Aside from its devastating physical and emotional toll, cancer treatment often inflicts a huge financial burden on those diagnosed. Statistically, the risk of cancer directly correlates with age and is highest for those 65 years and older. Because of this correlation, older people (many of whom rely on Social Security benefits for their living expenses) are often the most financially vulnerable members of our society when an unexpected cancer diagnosis enters their lives.
Much has been written not only about the Social Security Administration’s inability to provide sufficient benefits to those who most need them the most, but also about the looming shortfall of funds needed to maintain the system as the U.S. population ages. In an effort to increase monthly benefits and preemptively prevent a funding crisis, some members of Congress have recently introduced two different pieces of legislation intended to address some of the current and future problems facing our Social Security system.
The first bill, the “Social Security 2100 Act,” seeks to shore up the solvency of the current system through the year 2100.
- Introduced in the House of Representatives in late January, by Rep. John Larson (D-CT), and supported by more than 200 members of Congress, this bill would generate increased revenue for the benefits paid through the Social Security system by taxing wages over $400,000 a year.
- Currently, Social Security taxes are taken only from earned wages up to $132,900, so someone making $133,000 a year contributes the same amount to fund Social Security as someone who earns $13 million a year.
- The Larson bill seeks to change that inequity by collecting FICA contributions from the first $132,900 earned and from all earnings over $400,000.
- Larson’s plan would gradually phase in an increase in the overall contribution rate that currently funds Social Security benefits from 6.2% to 7.4% over the next two decades. (For those that don’t like math, that works out to roughly a 50 cent increase per week per person each year). Through these two simple changes, the Larson bill claims to be a way to generate enough extra revenue to ensure the solvency of the Social Security system for the next 80 years.
The second bill, the “Social Security Expansion Act,” introduced in the Senate in February by Sen. Bernie Sanders (I-VT), shares the same primary objective as the Larson bill, but accomplishes the goal a bit differently.
- Supported by several of the current 2020 presidential candidates, this does not increase the payroll tax rate, but instead generates additional revenue for Social Security by requiring FICA tax on all income for the first $132,900 earned and then on all earnings over $250,000.
- The Sanders bill shares many similarities with the Larson bill, but also gives Social Security benefits to the children of deceased or disabled parents, until they achieve the age of 22 so long as they remain in school full-time.
- Both bills would increase payments to lower-income recipients and change the cost-of-living calculation to account for the fact that older Americans spend a disproportionate amount of their income on healthcare.
The average annual Social Security benefit for 2019 is just under $18,000 and, with the reduction in availability of pensions in the private sector, the financial position of those retiring gets bleaker each year. The fact that lawmakers have recognized the need to address these issues is promising.
Cancer Community Advocacy
If this is a topic of interest to you and you would like to advocate for or against these bills, get involved in advocacy.
- Contact your elected officials and let them know how you feel.
- To find your elected officials or learn more about becoming an advocate, visit our Advocacy page.
- You can also find the Facebook and Twitter handles for the current members of Congress here.
As always, stay tuned. Will continue to provide updates as more information becomes available, about this issue that affects all of us.