Projections show that Social Security will only be able to pay 80% of scheduled benefits by 2035, making Social Security reform a top priority for Congress. Inflation protection for benefits is one of the biggest changes voters would like to see.
According to a June survey of 1,335 participants by Social Security Works and Data for Progress, 64% of respondents are “very concerned” the program won’t be able to cover full benefits for future generations, reports CNBC. Meanwhile, 20% are “somewhat concerned” and 10% are “only a little bit concerned.” The remaining 6% have no concerns at all.
Several proposals have been made to address Social Security’s funding shortfall, including raising Social Security benefits for all beneficiaries to match the rising cost of living. Eighty-three percent of respondents were in support of this proposal, 10% against it and 8% indicated they don’t know, CNBC added.
However, cost-of-living adjustments (COLAs) are made every year to make sure Social Security benefits keep pace with inflation. The COLA increased by 5.9% in 2022, but Mary Johnson, Social Security policy analyst for The Senior Citizens League, says that the Social Security COLA for 2023 could be as high as 8.6%, based on May Consumer Price Index data.
These annual changes are measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W. However, there are calls to use another index — the Consumer Price Index for the Elderly, or CPI-E — instead of the CPI-W.
Meanwhile, research shows that the CPI-E would not necessarily result in bigger benefit amounts, CNBC reported. According to the Center for Retirement Research at Boston College, the two indexes have had identical average annual increases from 2002 to 2021.
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