The Social Security Trust Fund is projected to run out of money by 2035. It means fixing Social Security is now a hot topic. We’ll share two proposed ideas on this episode of Monday Morning Money.
Video: Fixing Social Security
Plan for A Better Retirement
We created Monday Morning Money with one goal in mind—give you information which will inspire you to plan for a better retirement.
We publish a new episode each week. And, we will deliver it right to your inbox.
Don’t miss an episode, subscribe today!
The Plans for Fixing Social Security
Social Security 2100 changes the calculation of your retirement benefits. The changes result in an increase of about 2%
The language of the Social Security Expansion Act is vague. It states benefits will increase.
A Different Cost of Living Adjustment
Both proposals would change the cost of living adjustment. They will use the CPI-E. This measure better accounts for the rising costs for senior citizens. It gives more consideration to things like prescriptions and medical care.
Less Income Tax on Your Social Security Benefits
The House Bill will reduce income taxes on your Social Security benefits. Currently up to 85% of your retirement benefits can be taxed.
The Senate Bill does not address income taxes on Social Security benefits.
A Larger Minimum Benefit
Both proposals would increase the minimum benefit to 125% of the poverty level.
Paying For It
The House Bill would gradually increase Social Security taxes. The tax rate will rise from 12.4% of eligible income to 14.8% over several years. It would also assess Social Security taxes on earned income over $400,000 per year.
The Senate version would tax all earned income, and remove the earnings cap. It would also tax all forms of income for those who make more than $250,000 per year. This includes things like dividends and capital gains.
More Videos About Social Security
All month, we have focused on Social Security. If you would like to catch up on the other episodes they are linked below.
Neal Watson is a Certified Financial Planner™ Professional and a Financial Advisor with Fleming Watson Financial Advisors He typically works with people who are planning for retirement. Fleming Watson is a Registered Investment Advisory firm located in Marietta Ohio. Our firm primarily serves Marietta, Parkersburg, Williamstown, St. Marys, Belpre, Vienna and the surrounding communities in Washington and Noble Counties in Ohio and Wood and Pleasants county in West Virginia.