The long-term financial status of the Social Security Trust Funds released from the Social Security Board of Trustees. From the annual report on July 13, 2017. The Trustees calculation for Social Security beneficiaries will receive a 2.2 percent cost-of-living increase starting January 1, 2018. Therefore, the total increase approximately $30.00 per a month for the average retired worker and disability recipients. As the result, the 2.2 percent increase is the largest since 2011. However, it is a large improvement compared to 0.3 percent increase for this year. Regrettably, in 2016 there was no cost-of-living-adjustment (COLA) in 2016. However, the trustees decided the low COLA is due to the unusual weak inflation. The official announcement for the COLA will officially release on October 13, 2017.
Social Security Beneficiaries will receive 2.2 Percent Starting January 1, 2018
Consequently, the Social Security Board of Trustees does acknowledge the Social Security programs are in financial difficulties. However, the current benefits for retirees already are over the payroll tax deductions paid in by workers and their employers. Strangely enough, sixty million Social Security beneficiaries will see benefits reduced by 77% by 2034. If there are no changes made to the system. Furthermore, due to current Trustees Funds of $2.85 trillion will deplete.
However, Social Security Board of Trustees has several proposals to introduce and help eliminate this deficit fall of funds.
- To increase or eliminate the maximum $127.200 for 2017 earnings to the Social Security tax. For this reason, it gradually raises the retirement age for full benefits. Not to mention in 1983 when the retirement age raised from 65 to 67. The average life expectancy of Americans has increased by three years since 1983. But the proposal suggests raising the retirement age from 67 to 70 for full benefits.
- The proposal introduced to Congress on June 27, 2017 (H.R. 3077) called “Senior Citizens Freedom to Work Act of 2017”. This bill will eliminate the earnings test for an individual under full retirement age who get a Social Security check. But continue to work. For 2017 any yearly earnings over $16.920 these worker’s Social Security benefits tax withheld by $1 for every $2 earned over the limit. This earning test will discourage older individuals from working and continuing to pay into the system.
Although this will be the largest COLA for Social Security recipients in six years is good news. It is very clear the adjustments are much-needed for these programs. Also, for future generations who are paying into the Social Security system with the hope of getting benefits someday.
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