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The Social Security Expansion Act: What You Need to Know

| February 22, 2019
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Introduced into the Senate on 2/16/2017, Senator Bernie Sanders has recently re-introduced this amendment as part of his presidential campaign. It would amend the current social security system to help boost social security payouts, revise the current Cost-of-living calculation for elderly beneficiaries, and enhance it’s protections to ensure longevity.

The Original Amendment: To enhance Social Security Benefits and ensure the long-term solvency of the Social Security program.

Here are the main points of interest of the original bill of 2017:

  1. Increase the Primary Insurance Amount for all eligible beneficiaries, beginning in 2023.
  2. Revise computation of the COLA to use the Consumer Price Index for Elderly Consumers. The official switch would be from the current CPI-W index to using the CPI-E index.
  3. Increase the special minimum primary amount for lifetime low earners based on years in the workforce.
  4. Extend payroll taxes on wages, salaries, and self-employment earnings to income above $250,000
  5. Increase the tax rate on investment gain from 3.8% to 10%

Senator Sanders would like to see the following changes to help provide higher income for low-income seniors and requiring the wealthy to pay more into Social Security. Here are his main points of interest:

  1. Increase the Primary Insurance Amount for all eligible beneficiaries, beginning in 2025.
  2. Provide an extra $1,300 a year to low-income seniors. Low-income seniors is defined as to those earning less than $16,000 in annual income.  Older beneficiaries would see an average increase in benefits of $43 per month at age 80 and $73 per month at age 90.
  3. Switch the current COLA index from the CPI-W the CPI-E, effective December 2021.
  4. Again, extend the payroll taxes on wages, salaries, and self-employment earnings to income above $250,000. The gap for those earning between $132,900 and $250,000 would not be affected.  Effective in 2020.
  5. Increase the tax rate on net investment income tax from 3.8% to 10%, again same as the original act of 2017. This would affect those who earn over $200,000 for individuals and $250,000 for couples.  Effective in 2020.
  6. Continue benefits for children of disable, or deceased workers until they attain the age of 22 if the child is in high school, college, or vocational school, beginning in 2020.

Need help or have questions regarding your Social Security? We can help.

We can help you strategize your Social Security benefit as part of your total retirement income plan. 

Give us a call at 320.222.4236 to schedule your no-cost meeting.

Or you can email me at tim@taatjesfinancial.com.

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