Research Research ComplianceTSCL believes that Congress should strengthen Social Security's protections by enacting legislation to prohibit the use of unauthorized earnings from being counted toward eligibility for Social Security benefits..Indeed, the Social Security Administration does not "promise" a specific amount of benefits, but they do not promise to replace a specific percentage of pre-retirement earnings either. Both benefit amounts and "replacement rates" can change at any time if Congress and the Social Security Administration deem it necessary. Prior to the 1977 changes, the replacement rate was not a stable percentage. For people who retired under the 1972-73 flawed formula, replacement rates grew from 39% to a high of 54%. The new benefit formula led to a lower, more stable replacement rate of about 43%, as well as lower benefits..Based on consumer price index data through May of this year, TSCL's Social Security policy analyst and study author, Mary Johnson, estimates that the COLA for 2018 may indeed be significantly higher than in recent years - around 1.9% - 2.1% - but that could change since there are still several months to go before the COLA is announced in October. … Continued
Charts SlidesTSCL recently released an analysis of the proposal that estimates the chained CPI would cut the growth in average benefits of ,100 today by about ,634 over the course of a 25-year retirement, and that assumes that the economy becomes more stable soon. Nevertheless, the reductions in COLA growth compound over time, and are deepest when seniors are the oldest and sickest. By the time seniors are in their late 80s or 90s, when they are most likely to have chronic health problems, monthly benefits would be about 5 lower using the chained CPI..Then last week the Centers for Medicare and Medicaid Services announced it will make sure that a COVID-19 vaccine will be made available to all seniors at no cost once a vaccine is approved..Despite known challenges ahead for seniors, the COLA may be the next victim of the fiscal cliff. Leading deficit reduction plans under discussion would significantly whittle the Social Security benefits that the majority of seniors count on for more than half of their income. … Continued