Why Social Security Needs to Change the Way It Calculates Raises
Maurie Backman takes readers through how Social Security calculates the annual cost of living adjustment (COLA). She discusses why COLAs have been so low and what might be done to improve on that. Between 2002 and 2011, Social Security COLAs averaged 2.43%, in line with the general rate of inflation. Between 2012 and 2021, on the other hand, COLAs averaged just 1.65%. Backman explains the CPI-W index currently used to calculate COLAs and the CPI-E index that many suggest would be better. The latter is more tailored to the kinds of purchases that someone aged 62 and older actually makes. Full article here.
The Association of Mature American Citizens (AMAC) believes Social Security must be preserved and modernized. This can be achieved by making modest changes in cost of living adjustments and the retirement age, with no additional taxes on workers. AMAC advocates for a bipartisan compromise, “The Social Security Guarantee Act,” taking selected portions of bills introduced by former Rep. Johnson (R-TX) and current Rep. Larson (D-CT) and merging them with the Association’s own well researched ideas. One component is Social Security PLUS, a new, voluntary plan that would allow all earners to have more income available at retirement. This component is intended to appeal especially to younger workers. AMAC is resolute in its mission that Social Security be preserved and modernized and has gotten the attention of lawmakers in DC, meeting with a great many congressional offices and their staffs over the past several years. Read AMAC’s plan here.