Social Security is a vital lifeline for millions of Americans, providing financial stability in retirement or in the event of disability.
However, changes are on the horizon for Social Security payments that could impact how much recipients receive and when they receive it.
Here are three major changes coming soon to Social Security payments.
1. Cost-of-Living Adjustment (COLA) Changes:
One of the most significant changes coming to Social Security payments is the way Cost-of-Living Adjustments (COLA) are calculated. Currently, COLAs are based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
However, the Social Security Administration is considering switching to a different measure of inflation known as the Chained Consumer Price Index for All Urban Consumers (C-CPI-U).
This change could result in lower COLAs for Social Security recipients, making it more difficult for them to keep up with the rising cost of living.
2. Increase in Full Retirement Age:
Another major change on the horizon for Social Security payments is an increase in the full retirement age.
Currently, the full retirement age is gradually increasing from 65 to 67 for those born in 1960 or later.
However, there are discussions in Congress about further increasing the full retirement age to as high as 70.
This means that future retirees may have to wait longer to receive their full Social Security benefits, or choose to receive reduced benefits by claiming early.
3. Potential Changes to Spousal Benefits:
Spousal benefits are another area of Social Security payments that could see significant changes in the near future.
Currently, spousal benefits allow a spouse to receive up to 50% of their partner’s Social Security benefit if they have reached full retirement age and have not claimed benefits on their own record.
However, there are discussions about potentially scaling back spousal benefits or eliminating them altogether in order to shore up the long-term financial sustainability of the Social Security program.
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Conclusion
As Social Security faces financial challenges and an aging population, changes to Social Security payments are inevitable.
Whether it’s adjustments to COLAs, increases in the full retirement age, or changes to spousal benefits, these changes could have a significant impact on current and future Social Security recipients.
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