https://www.newsmax.com/us/soc...dkt_nbr=010102o43xlh

Social Security Benefits Could Rise Nearly 4% in 2027

Social Security recipients could see their monthly benefits increase by nearly 4% next year, according to early projections for the 2027 cost-of-living adjustment (COLA).

CBS News reported that estimates from retirement and senior advocacy groups currently place the increase between 3.6% and 3.8%, although the final figure will not be determined until October.

The Senior Citizens League is projecting a 3.8% COLA for 2027, while AARP has estimated a slightly lower increase of about 3.6% based on current inflation trends.

The Social Security Administration will calculate the official adjustment using inflation data from July, August, and September.

The COLA is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, known as CPI-W.

The formula uses the average CPI-W reading from the third quarter of the year to determine the following year's benefit increase.

Some senior advocates have argued that CPI-W does not accurately reflect the spending patterns of older Americans, whose budgets often are more heavily affected by costs such as health care, housing, and food.

Groups including AARP have supported using an alternative measure, known as the Consumer Price Index for the Elderly, or CPI-E, which would more closely track expenses for seniors.

If the increase reaches the higher end of current estimates, the average retired worker receiving about $2,000 per month could see an increase of roughly $75 to $80 per month.

The actual increase will vary depending on each recipient's current benefit amount.

The projected increase would follow a 2.8% COLA for 2026 and come after several years of larger adjustments driven by elevated inflation.

Social Security benefits rose 8.7% in 2023, the largest annual increase since 1981, after inflation surged in the wake of the pandemic.

The final 2027 COLA announcement is expected in October, with the new benefit amounts scheduled to take effect in January 2027.

https://www.newsmax.com/newsfr...dkt_nbr=0105041bfbho

Bipartisan Senate Bill Addresses Social Security Shortfall

With Social Security's looming insolvency date roughly six years away, a bipartisan group of lawmakers introduced a proposal Tuesday to grapple with one of the most consequential financial challenges facing the federal government.

The Protecting Retirement Opportunities and Maintaining Income Security for Everyone, or PROMISE Act, comes on the heels of the latest Social Security Board of Trustees' annual report, which found that Social Security's retirement trust fund is projected to face a funding shortfall in 2032, a year earlier than last year's projections.

"The longer Congress waits, the more difficult it will be to address the program's financial shortfall," Sen. Dick Durbin, D-Ill., one of the bill's authors, said in a statement. "We were elected to solve problems — we owe it to our kids and grandkids to protect and strengthen this critical program."

Durbin, who is retiring, is joining with Sen. Tim Kaine, D-Va., Sen. Angus King, I-Maine, and outgoing Sens. Bill Cassidy, R-La., John Cornyn, R-Texas, and Thom Tillis, R-N.C., in backing the Social Security legislation, which calls for an "independent, bipartisan advisory committee" that would make recommendations to Congress.

Sens. Chris Coons, D-Del., and Alan Armstrong, R-Okla., signed onto the bill right before its introduction.

The bill is designed to force Congress to confront Social Security's long-term financing problem by guaranteeing that lawmakers vote on a solvency plan. It culminates in an up-or-down vote on a plan that restores Social Security solvency for at least half a century.

Social Security's looming funding shortfall is mainly the result of lower projected birth rates, reduced immigration and reduced trust fund revenue, according to the Board of Trustees' report.

The looming challenge for the programs is a partial funding gap, not a collapse. Even after trust fund depletion, the system will continue issuing benefits, albeit at reduced amounts.

Traditionally, Republicans have been skeptical of endorsing tax increases, while Democrats have been critical of calls to raise the age of Social Security eligibility. In 2022, members of the House Republican Study Committee proposed raising the age at which someone could qualify for Social Security and Medicare.

Social Security benefits were last reformed roughly 40 years ago, when the federal government raised the eligibility age for the program from 65 to 67, based on recommendations from a commission under the leadership of Alan Greenspan.

Still, there are ongoing bipartisan calls to find a way to provide long-term funding to Social Security.

Last month, Sens. Elizabeth Warren, D-Mass., and Bernie Moreno, R-Ohio, wrote an editorial in The New York Times calling for raising the cap on the Social Security payroll tax.

For 2026, the payroll tax cap, or maximum amount of earnings on which you must pay Social Security tax, is $184,500.

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Social Security legislation, which calls for an "independent, bipartisan advisory committee" that would make recommendations to Congress.

More death by committee. No legislation to fix it, just more study. More kick the can down the road.

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Protecting Retirement Opportunities and Maintaining Income Security for Everyone, or PROMISE Act

Who comes up with this shit?

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in backing the Social Security legislation, which calls for an "independent, bipartisan advisory committee" that would make recommendations to Congress.

Heres one, stop raiding SS money to help pay for all the BS graft projects, defund all NGO's and make it illegal to use an NGO or any organization that will function like an NGO,

Stop the open loopholes for theft of government money and Tax all congressional members stock holdings at 30% of it's value of their portfolios while in office.

Maybe fix your own house, then we can talk about SS reform and how to improve the system for recipient's considering how the feds created hyperinflation that devalued the dollar.

But wait, it gets worse:
It's not just Social Security, it's Medicare too...

New CRFB Estimate Shows Steep Cost of Social Security Inaction

If Congress fails to address program's projected 2032 insolvency, a typical newly retired dual-income couple could see annual benefits cut by $16,900

If nothing were done by Congress to shore up Social Security before the program reaches projected insolvency in late 2032, the estimated 22% benefit cut resulting from insolvency means a typical newly retiring dual-earning couple would lose $16,900 in annual benefits at the start of 2033.

That’s according to a new estimate released July 16 by the nonpartisan Committee for a Responsible Federal Budget. Thursday’s release points out that Social Security is just 6 years from insolvency according to the program’s recent 2026 Trustees Report. At that point, the law requires benefits to be reduced to ensure the program’s costs do not exceed its revenues.

Large benefit cuts looming

And then in 2033, CRFB points out that the Medicare Hospital Insurance trust fund is projected to become insolvent, cutting spending by 11%, which would threaten retirees’ healthcare access while they experience the Social Security shock to their incomes.

The size of these benefit cuts would vary with a couple’s age, marital status, and work history. For example, a typical single-income couple would face an annual loss of $12,700 while a dual-earning, low-income couple would face a yearly cut equal to $10,200. And high-income couples would see cuts as large as $22,300.

While the absolute size of these cuts would be smaller for low-income couples than high-income couples, they would also be a larger share of total incomes for low-income retirees and hence more financially disruptive. The cuts are in nominal dollars and would be about 15% smaller when adjusted for inflation.

“These benefit cuts are smaller than we estimated last year—due mainly to the higher near-term revenues and lower near-term costs projected in this year’s Trustees’ Report,” said the CRFB release. “However, these cuts are projected to grow over time due to the rising gap between Social Security’s costs and dedicated revenues. At the end of the century, annual benefit cuts are expected to reach 35%.”

With insolvency just 6 years away, senators elected in November will be in office when the fund is projected to run dry. CRFB says policymakers should urgently begin the work of restoring Social Security’s long-term solvency.

“Social Security is the bedrock of our nation’s retirement system, and Washington’s failure to secure its finances has put the retirement security of tens of millions of seniors in jeopardy,” said CRFB President Maya MacGuineas in a statement this week in support of the PROMISE Act. “Any credible effort to help save Social Security—whether through a commission, the Social Security Advisory Board (SSAB), specific policies, or committee process—is a step in the right direction.”

The PROMISE Act would instruct the bipartisan Social Security Advisory Board (SSAB) to submit a “base bill” to extend solvency and then establish a process for Congress to consider, amend, and potentially pass the bill. Absent an SSAB proposal, the legislation allows the House and Senate majority leaders to put forward their own base bill, or else any bipartisan pair in the House or Senate may do so. Initial and final legislation would be required to achieve at least 50-year solvency, and a new decennial solvency review process would also be created.

“These proposals keep Congress and the public involved in this important process,” MacGuineas said. “Hopefully they can give our leaders the kick in the pants they need to start working together to secure Social Security for current and future generations.”

CRFB has proposed several novel solutions of its own over the past year—an Employer Compensation Tax, a Social Security COLA Cap, and a Six Figure Limit on Social Security benefits—to help kickstart the work of finding trust fund solutions.

https://401kspecialistmag.com/...utm_campaign=weekend

No surprise that Medicare is also going bust in the near future. Being a government program, waste, fraud, and abuse are rampant. No government program is more cost efficient than the free market.

It was either Thomas Sowell or Walter Williams who explained the hierarchy of bang-for-the-buck.

The most efficient is a person spending his own money for his own benefit. He will find the best tradeoffs for his needs. Supplier competition will provide the best array of options to buyers.

The second most efficient is spending you own money for someone else's benefit. You are price conscious but you don't care as much about how well the product meets the recipient's needs as you are when you buy for yourself.

The next most efficient is spending someone else's money for your own benefit. You won't be price conscious but you'll look for a good product that meets your needs.

The worst is spending someone else's money for other people's benefit. You don't care about either cost or quality.

At least with SS the government is controlling how the money is spent.

Guess who turns 65 in 2032! Yup, yours truly.

Social Security Retirees Set to Collect 33% More Than They Paid In

New CRFB analysis finds Americans retiring this decade are scheduled to receive benefits equal to 133% of combined worker and employer payroll taxes, as the program heads toward a 2032 trust fund shortfall

Americans retiring this decade are on track to collect scheduled Social Security benefits totaling 133% of everything they and their employers paid in program taxes, according to a new analysis released Wednesday from the Committee for a Responsible Federal Budget.

Strip out the employer match, and retirees are expected to receive 265% of what they contributed to the system themselves, measured in present-value dollars. The report, which cites data from a 2025 Congressional Budget Office report, found a median-wage retiree in 2027 will collect about $730,000 in lifetime benefits on combined contributions of less than $200,000. Retirees are scheduled to receive all of their contributions, plus interest, plus an additional 33 cents for every $1 they and their employer paid in.

“On a nominal basis, a typical retiree’s scheduled benefits will be almost 4 times as large as total taxes paid and more than 7 times as large as their own taxes paid,” the Wednesday CRFB blog post states.

The analysis also reveals that benefits received outpace total taxes paid after just 6 years of collecting, and outpace the worker’s own direct contributions after only 3 years.

CRFB’s blog post notes that Social Security is currently just 6 years from insolvency, with the trust fund is due to run out in 2032, which would lead to what is currently calculated at an automatic 22% benefit cut absent congressional action to address the issue.

While there is widespread agreement that the issue needs to be tackled, there is no consensus on how to do so.

“One impediment to the enactment of thoughtful solutions is the myth that Social Security benefits directly represent seniors’ hard-earned money that they paid for in full through past payroll tax contributions and thus are entitled to as an unmalleable earned benefit,” CRFB’s blog states. “Although politicians and special interests weaponize this misperception to fight against any changes to the program, it is based on a fundamental misunderstanding of how the program works and of how much it pays out. Fixing the system will require putting this myth to bed.”

Social Security is not structured like a retirement savings account in which workers’ payroll tax contributions are set aside to fund their future benefits. Instead, it operates primarily as a pay-as-you-go social insurance program, with payroll taxes collected from current workers used to pay benefits to current retirees. An individual’s benefits are not directly tied to the amount of payroll taxes paid over a career, but are determined through a formula based on wage history and other factors, including retirement age, years worked and marital status.

That distinction is particularly important as policymakers debate Social Security’s finances. The blog adds that the program’s current benefit formula pays out about 33% more in benefits than workers pay in taxes and, based on the latest Social Security Trustees projections, is expected to cost roughly 35% more than it collects in revenue over the next 75 years. CRFB points out that scheduled benefits therefore exceed both workers’ past contributions and what the program can sustainably finance under current law.

Rather than suggesting current benefits should simply be reduced to match past contributions, CRFB argues that policymakers need to bring Social Security’s future costs and revenues back into balance through changes to benefits, taxes or some combination of the two. With the program facing the projected funding shortfall that could trigger the 22% benefit reduction if Congress fails to act, the organization is urging lawmakers to begin work on trust fund reforms before the financial pressure becomes more immediate.

https://401kspecialistmag.com/...utm_campaign=weekend

Fear mongering at its finest. Along with global warming. How many times? And every one of them was wrong.

Speaking of that...more "talk"

https://www.newsmax.com/financ...dkt_nbr=010102fu23t8

Lawmakers Eye Ways to Avert Social Security Cut

With the few months they have left as senators, Democrat Dick Durbin of Illinois and Republican Bill Cassidy of Louisiana have embarked on a mission to save tens of millions of Social Security beneficiaries from a projected 22% cut in their benefits, starting in just six years.

It is one of the most perilous political efforts that a member of Congress can undertake, so it is telling that the push is being led by two lawmakers who have little to lose at this stage of their careers.

“We’ve been at this six years, eight years. It’s incredible how long I’ve been at it,” Cassidy said. “But Durbin came up to me and he goes, 'Bill, I’m leaving the Senate soon. We need to take a ride at it.'”

Their idea to extend Social Security’s solvency is one of a few that have been formally offered this Congress. None has gained much traction, but it is a start as more lawmakers weigh in on a problem that will likely confront the group of senators elected this fall as well as the next president. Pressure for action is sure to grow as 2032 draws closer.

The measure that Durbin, D-Ill., and Cassidy, R-La., are pushing would not dictate an outcome, but instead set up a process for Congress to take action. It calls for the bipartisan Social Security Advisory Board to collect public input and submit draft legislation to Congress that would keep the program's retirement trust fund solvent for at least 50 years.

The resulting bill would then be introduced by the majority leaders of the Senate and House. If they do not want to go along, any member could sponsor the bill. It would then be referred to the two committees with jurisdiction over Social Security — the Senate Finance Committee and the House Ways and Means Committee.

Both committees would have the chance to debate the bill and amend it if they wish. If not, the original bill drafted by the advisory board would be placed on the Senate and House calendars for consideration. Lawmakers could offer substitute proposals, with final votes after 100 hours of debate. Passage would require a three-fifths vote in the 100-member Senate and a simple majority in the 435-member House.

Even though the bill does not prescribe a solution for replenishing Social Security, sponsors have struggled to win support. Cassidy voiced exasperation in a recent floor speech.

“For some people, the time to do Social is never," Cassidy said. “Don't disturb Congress. They don't want to take a tough vote. Even if that vote only sets up a process.”

AARP has come out against the bill, saying that the effort amounts to “fast-tracking” Social Security changes through a process that limits what type of amendments are offered and sets arbitrary procedural deadlines.

cont...

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Originally posted by downtownv:
Fear mongering at its finest. Along with global warming. How many times? And every one of them was wrong.

That's what's called a false equivalency. 2032 has been the year for decades and there is no guessing in the Math.

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Strip out the employer match, and retirees are expected to receive 265% of what they contributed to the system themselves, measured in present-value dollars.
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“On a nominal basis, a typical retiree’s scheduled benefits will be almost 4 times as large as total taxes paid and more than 7 times as large as their own taxes paid,” the Wednesday CRFB blog post states.


https://401kspecialistmag.com/...utm_campaign=weekend

What a bunch of bs! This article is trying to blame recipients for the fund going insolvent, while it is really the government's fault.

First of all, the "employer match" comes from the employee's productivity, meaning it is actually paid by the employee. It just never shows up on the paystub.

Secondly, the returns are horrible compared to privately invested. Assuming only a 7% annual return, over 40 years the value will be 5.5 times more than the money put in. At 10% average return it grows to over 13 times the amount invested. Had the government invested the money, there would be more than enough.

The real fix is to transition younger workers to a private retirement savings program. It can probably be done with little or no pain to almost everyone.

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Originally posted by Fly-Sig:
The real fix is to transition younger workers to a private retirement savings program. It can probably be done with little or no pain to almost everyone.

I think without current workers paying into the system, the fund would run dry in a couple of years.

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Originally posted by MNSIG:

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Originally posted by Fly-Sig:
The real fix is to transition younger workers to a private retirement savings program. It can probably be done with little or no pain to almost everyone.

I think without current workers paying into the system, the fund would run dry in a couple of years.

It would have to be a transition, with workers continuing to pay in, but with a declining number of people getting SS.

Something like this: When enacted, those under 51 will not get any SS. Those between 51-59 will get a prorated SS, e.g if age 59 will get 90% of SS, those age 51 will get 10%. Those age 60+ will get full SS.

Payments into SS will be on a schedule to tail off. We could assume say a 40 year span until almost nobody will be collecting. Only a few would be getting a smaller prorated check. Thus the taxes would be on a declining curve over the next 40 years.

Probably some form of automatic never-taxed retirement account needs to be created. I'd like to see a mandatory automatic contribution of 5%, with the option for the employee to opt-out (or increase the %) after the fact. These accounts would grow to more than replace SS easily for younger workers, as long as they don't opt out.

The idea is to have a declining SS participation along with an increasing private individual retirement account participation. Get the government out of it.

Were I King, I would also require the "employers" share of FICA be reported on the paycheck as income, then deducted for FICA. Workers need to know the full scale of how they're being taxed.

The political games in Washington DC never end. Very little willingness to assess a situation honestly and do the necessary. For example, I remember decades ago when the Air Force told us that we would be able to receive lifelong care at military hospitals. The reality became that bases and hospitals closed and eventually DOD decided to save money by forcing military retirees to sign up for Medicare at age 65 or lose their retired military ID card (would expire), adding to the budget cost of Medicare. Which is why I do not trust the federal government (especially Congress) to "fix" Social Security.

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What a bunch of bs! This article is trying to blame recipients for the fund going insolvent, while it is really the government's fault.

It is the government's fault. The article points out why:

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Social Security is not structured like a retirement savings account in which workers’ payroll tax contributions are set aside to fund their future benefits. Instead, it operates primarily as a pay-as-you-go social insurance program, with payroll taxes collected from current workers used to pay benefits to current retirees.

As the money is not set aside and invested, it takes an ever-expanding base of taxpayers, or higher rates, to cover benefits which exceed contributions. In an era of flat to declining population and lower work force participation rates, the ponzi is exposed.

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Originally posted by Fly-Sig:
The real fix is to transition younger workers to a private retirement savings program. It can probably be done with little or no pain to almost everyone.

I agree. I like your gradual approach.

I lost count on how many times it was going to dry up.

I've heard these claims for at least half a century. That's no exaggeration. My Tenth Grade Civics teacher was ringing the alarm bell and I've heard the panic at intervals ever since.

So... it's not a problem?
The board responsible for running the program tells us it's projected to go insolvent and...
We should not believe them? Their math is wrong? Do nothing?
We shouldn't tweak or change the program in any way?
I'm asking as someone who plans to start collecting in 2032...

This thread isn't very long. My responses to it are easily found and read. The questions you're asking me now- I've already given my answers. All you have to do is read what I've posted.