Social Security COLAs are failing retirees - The Motley Fool
Social Security COLA is calculated by comparing the average Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the third quarter of the current year to the same period in the previous year, with the percentage increase determining the benefit adjustment. Although Social Security COLAs are designed to keep benefits in line with inflation, in practice, they often lag behind the actual cost increases experienced by retirees, especially for healthcare and other senior-specific expenses. Maurie Backman, writing for The Motley Fool, explains how Social Security benefits are losing buying power, and why lawmakers aren’t fixing the problem. Read Ms. Backman’s article here…
The Association of Mature American Citizens (AMAC) is actively engaged in providing Congress with ideas for a long-term solution. As an example of leading thinking on reforming Social Security, AMAC believes Social Security must be preserved and modernized to serve future generations. AMAC’s position is that this can be achieved without payroll tax increases through relatively minor program modifications, including changes to the cost-of-living adjustment (COLA) process and modifications to the formulas for calculating initial benefits for higher-income beneficiaries. Changes to the age for maximizing benefits are included in AMAC’s position, along with (1) an increase in the thresholds where benefits are subject to income tax; (2) indexing of these thresholds annually to account for inflation; (3) changing the taxable maximum formula to address the unintended loss of revenue; (4) improving survivor benefits, (5) eliminating the reduction in benefits for those choosing to work before full retirement age; and (6) improving savings tools for future retirees, including a savings account that builds estate value. AMAC is resolute in its mission that Social Security be preserved for current and successive generations and has gotten the attention of lawmakers in D.C., meeting with many congressional offices and staff over the past decade.
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