The former vice president is proposing a plan to shore up Social Security that would raise minimum benefit amounts for lifelong workers with low incomes.
FLORIDA—Roughly 90% of retirement-age people in the United States receive Social Security benefits, with one in four relying on Social Security for all, or nearly all, of their income. But now the writing, or rather the numbers, are on the wall: Social Security is facing an estimated $16.8 trillion funding shortfall between 2035 and 2094.
This could disproportionately affect Florida, where nearly 21% of the total population is made up of people 65 years of age or older, a demographic that will surely increase over the years. In fact, data from the last Census shows that Florida’s retirement-age population continues to grow faster than any other age group, with one in five of Florida’s residents age 65 or older. But this matters to all Floridians, not just those approaching retirement, as 2035 is less than 15 years away.
With Social Security’s Trust Fund in deficit, Democratic presidential contender Joe Biden has unveiled a plan to make the program solvent and prevent cuts to American retirees.
Biden Steps In
In contrast to President Donald Trump, who wants to scrap the payroll taxes that fund Social Security and Medicare, Joe Biden is proposing a plan to shore up Social Security by taxing those who earn more than $400,000. The plan includes:
- Raising minimum benefit amounts for lifelong workers with low incomes.
Biden’s proposal would set the special minimum benefit limit at 125% of the federal poverty line, which in 2019 was $1,301 a month. By comparison, as of 2019 the full special minimum benefit for lifetime low earners was $886.40 a month. That’s a significant increase in monthly payout for lifetime low wage earners with 30 years of work history. Payouts would increase on par with the National Average Wage Index in the following years.
- Boosting the purchasing power of Social Security dollars, which has been reduced by 30% since 2000.
That’s because the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) doesn’t accurately—or realistically—measure the costs that seniors have to deal with on a day to day basis, including raises in rent, out-of-pocket healthcare costs, travel expenses, etc. Under Biden’s plan, the Consumer Price Index for the Elderly (CPI-E), which specifically tracks the spending habits of persons aged 62 and up, would become the new inflationary measure.
- Preventing surviving spouses from seeing huge cuts in their total family benefits after the death of a spouse.
For many couples, the death of a spouse means that Social Security benefits will be cut in half. The Biden Plan will allow surviving spouses to keep a higher share of the benefits by raising the monthly payment by about 20% for affected beneficiaries.