New COLA calculation bill in Congress - AMAC &

Erin Bendig of Kiplinger explains a new bill in Congress that could result in a change to Social Security cost of living adjustments (COLAs) that could benefit retirees. The Boosting Benefits and COLAs for Seniors Act, proposed by Rep. Ruben Gallego (D-AZ) and Sen. Bob Casey (D-PA), aims to “protect and expand benefits for older adults who rely on them” by making significant changes to the COLA calculation.  The argument, while not a new one, states many older adults struggle to afford necessities, like food, medication and clothing, because current Social Security benefits have not kept up with rising costs.  The change would be from what is known as CPI-W to CPI-E, but only if the latter metric were higher. However, missing from this bill is any talk of addressing Social Security’s looming insolvency. This COLA change alone absent any other reforms would likely accelerate the date of across the board cuts to all, predicted at 23% in just 8 years. Full article here.

As an example of the leading thoughts on reforming Social Security, the Association of Mature American Citizens (AMAC, Inc.) believes Social Security must be preserved and modernized.  This can be achieved without tax increases by slight modifications to cost of living adjustments and payments to high income beneficiaries plus gradually increasing the full (but not early) retirement age.  AMAC Action, AMAC’s advocacy arm, supports an increase in the threshold where benefits are taxed and then indexing for inflation, and calls for eliminating the reduction in people’s benefits for those choosing to work before full retirement age.  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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