Social Security Benefits Going Up Next Year, Kind Of……

Andrew Cummings
June 24, 2016

Social Security could pay only 79 percent of benefits at that point. The average monthly payment is about $1,232, so the average increase would be a little less than $2.50, enough to buy a gallon of gasoline in most US markets.

The total costs of the combined Old-Age and Survivors Insurance and the Disability Insurance trust funds are projected to exceed its total income in 2020. After that, it would have to sell assets from its trust fund to pay benefits.

Last year, Social Security beneficiaries didn't receive any living-cost increase because falling energy prices led to an annual decline in the inflation gauge used to set such increases. The trustees' report looks at Medicare parts A (hospital insurance), B (physician and outpatient care insurance), and D (prescription drug insurance), but not at Part C (Medicare Advantage). There were 2.8 covered workers for each beneficiary previous year, down from 3.2 in 2008, and that ratio set to slide to 2.2 over the next two decades.

"In particular, additional payments of $500 million per year for one group of physicians and 5% annual bonuses for another group are scheduled to expire in 2025, resulting in a significant one-time payment reduction for most physicians".


"At the same time, we should expand and finance improved Social Security benefits, particularly for the most vulnerable".

"This report reiterates the urgent need to make reforms to Medicare and Social Security".

That's largely because the costs for both programs are expected to grow faster than the economy for the next two decades and then stay at or near relatively high levels for years after.

As CNN Money explains, options to secure Social Security for the next 75 years include immediately raising the Social Security payroll tax rate to 14.98 percent from 12.4 percent on the first $118,500 of wages, cutting benefits by 16 percent, or a combination of both. Premiums for high-income seniors - who already pay surcharges - also would rise.


They also often call for a mix of tax increases and spending cuts to reduce how steep either have to be.

By contrast, earlier this month, Obama told an audience in Elkhart, Ind., that Social Security should be made "more generous" and that "we could start paying for it by asking the wealthiest Americans to contribute a little bit more".

 

 


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