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USA Today
17 hours ago
- Business
- USA Today
4 Social Security changes Washington could make to prevent benefit cuts
4 Social Security changes Washington could make to prevent benefit cuts Show Caption Hide Caption Biden criticizes Trump administration's handling of Social Security Social Security overhaul sparks criticism from Biden over service disruptions, layoffs and automation as Trump defends changes as efficiency. Straight Arrow News Social Security is an important source of income for millions of Americans, but the program has a serious financial problem. Costs have increased faster than revenues in recent years because the aging population is growing more quickly than the working population. As a result, the trust fund, the financial account that pays benefits, is on track to be depleted within a decade. Specifically, the Congressional Budget Office estimates the trust fund will be exhausted in 2034. That would eliminate one source of revenue (i.e., interest earned on trust fund reserves), and the remaining tax revenues would only cover 77% of scheduled payments. That means a 23% benefit cut would be necessary in 2035. Fortunately, the lawmakers in Washington have several years to find a better solution. Here are four Social Security changes that could prevent deep, across-the-board benefit cuts. 1. Apply the Social Security payroll tax to income above $400,000 Social Security is primarily funded by a dedicated payroll tax, which takes 6.2% of wages from workers and employers. But some income is exempt from the payroll tax. Specifically, the maximum taxable earnings limit is $176,100 in 2025. Income above that threshold is not taxed by Social Security. Importantly, the Social Security program is projected to run a $23 trillion deficit over the next 75 years as it's strained by shifting demographics. But the deficit could be slashed by applying the payroll tax to more income. For instance, including income above $400,000 would eliminate 60% of the 75-year funding shortfall, says the University of Maryland. 2. Gradually increase the Social Security payroll tax rate to 6.5% over six years Under current law, the Social Security payroll tax rate is 6.2% for workers and their employers. But gradually raising that figure would eliminate a portion of the long-term deficit. For example, increasing thetax rate by 0.05% annually over a six-year period would eliminate 15% of the 75-year funding shortfall, according to the University of Maryland. Now that I've discussed two possible changes, let's step back and look at the big picture. There are basically three ways to resolve Social Security's financial problems: (1) increase revenue, (2) reduce costs or (3) some combination of the first two options. The changes discussed so far would increase revenue, but the next two changes would cut benefits. However, they are more subtle cuts than the 23% across-the-board reduction that would follow trust fund depletion. 3. Gradually increase full retirement age to 68 by 2033 Workers are eligible for retirement benefits at age 62, but they are not entitled to their full benefit — also called the primary insurance amount (PIA) — until full retirement age (FRA). Anyone that claims before full retirement age receives a smaller payout, meaning they get less than 100% of their PIA. FRA is currently defined as 67 years old for workers born in 1960 or later, but raising the figure would reduce the long-term deficit. For instance, increasing FRA to 68 years old by 2033, meaning it would apply to workers born in 1965 or later, would eliminate 15% of the 75-year funding shortfall, according to the University of Maryland. 4. Reduce benefits for retired workers with income in the top 20% Social Security benefits are determined as percentages of two bend points. Specifically, income from the 35 highest-paid years of work is adjusted for inflation and converted to a monthly figure called the average indexed monthly earnings (AIME) amount. The AIME is then run through a formula that uses two bend points to determine the PIA for each worker. Modifying the second (highest) bend point would eliminate a portion of the long-term deficit by reducing benefits for high earners. For instance, the University of Maryland estimates that reducing benefits for individuals with income in the top 20% could reduce the 75-year funding deficit by 11%. Here's the big picture: The four changes I've discussed would eliminate 101% of Social Security's $23 trillion funding shortfall, which would prevent across-the-board benefit cuts in 2035. The Motley Fool has a disclosure policy. The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY. The $23,760 Social Security bonus most retirees completely overlook Offer from the Motley Fool: If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets"could help ensure a boost in your retirement income. One easy trick could pay you as much as $23,760 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. JoinStock Advisorto learn more about these strategies. View the "Social Security secrets" »
USA Today
16-05-2025
- Business
- USA Today
5 Social Security tasks you probably didn't know you could do online
5 Social Security tasks you probably didn't know you could do online Show Caption Hide Caption Biden criticizes Trump administration's handling of Social Security Social Security overhaul sparks criticism from Biden over service disruptions, layoffs and automation as Trump defends changes as efficiency. Straight Arrow News There have been a lot of Social Security changes so far in 2025, and that can leave you feeling pretty nervous if you depend on your checks to cover your basic expenses. Some of the changes have sent people flooding the Social Security Administration's phone lines. As a result, average call wait times are now around 90 minutes — and that's just to get someone on the phone. If you have to apply for benefits, you'll have to schedule an appointment and wait weeks for a spot. Then, you'll wait a few more weeks for application approval. That's probably not a headache you want to deal with. Fortunately, you can complete a lot of important Social Security tasks online, including the following five things. And best of all, you'll never find yourself on hold. 1. Apply for benefits The Social Security Administration enables you to apply for retirement and spousal benefits online. You can also apply for Social Security disability benefits through the online form and possibly Supplemental Security Income (SSI) benefits if you apply for these at the same time as your disability benefits. However, you cannot sign up for survivors benefits or SSI for low-income seniors without calling the Social Security Administration or visiting a field office. It's worth noting that you may not have to sign up for survivors benefits at all if you're already receiving spousal benefits on your partner's work record at the time of their death. The online application forms enable you to save your progress and return to them at a later date if need be. Once you've submitted your application, you can check its status online. You can also appeal a denial through the same system. 2. Get personalized benefit estimates Those who aren't already on Social Security can use the benefit estimator tool located in their my Social Security account to see what kind of checks they could qualify for at various claiming ages. You can do this for retirement benefits as well as for spousal benefits. However, to estimate your spousal benefit, you'll need to know your spouse's birth date and the benefit they qualify for at their full retirement age (FRA) — 67 for most of today's workers. They'll probably need to open a my Social Security account of their own to figure this out. The benefit estimator tool also lets you test out different future income projections so you can see how a raise might affect your benefits. All this information can be helpful when determining the best age to apply for checks. 3. Get proof you receive benefits — or proof you don't Loan applications often require proof of your income. Certain programs, like housing assistance, often do, too. If you're receiving Social Security checks, these count as a part of your monthly income. You can print a benefit verification letter through your my Social Security account. Or if you're not receiving checks yet, you can print a letter proving that you don't currently receive Social Security. 4. Update account information When you move, it's important to update your address with the Social Security Administration to ensure it sends all future communications to the right place. You can quickly do this through your my Social Security account. You can also update your direct deposit information here. This used to take up to 30 days to process. But the Social Security Administration has recently changed the rule so these changes will now only take one business day. The option to change your direct deposit information this way is only available to beneficiaries residing in the U.S., though. If you live in another country, you will need to contact the Social Security Administration directly to make that change. 5. Identify someone to manage your benefits for you If you're worried that illness might leave you unable to manage your benefits on your own, you can designate a trusted person to take over that responsibility in your my Social Security account. This won't give the person the authority to take charge of your benefits right away. The Social Security Administration will only contact the person if you become unable to manage your benefits on your own. And you're free to change the person you want to manage your benefits for you at any time. If you're not comfortable making these changes online, you still have the option to call the Social Security Administration or make an in-person appointment at a field office. Just be prepared to wait a little longer if you go this route. The Motley Fool has a disclosure policy. The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY. The $ 22,924 Social Security bonus most retirees completely overlook Offer from the Motley Fool: If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets"could help ensure a boost in your retirement income. One easy trick could pay you as much as $22,924 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. JoinStock Advisorto learn more about these strategies. View the "Social Security secrets" »
Axios
04-05-2025
- Politics
- Axios
Trump's total government deportation push
The Trump administration is tapping multiple agencies for a whole-of-government campaign to achieve its goal of deporting millions. Why it matters: Controversial tactics — ensnaring even legal U.S. residents and citizens — have raised alarm and triggered court battles over executive power. Zoom in: The administration's playbook pulls several levers within the government beyond the Department of Homeland Security (DHS), which oversees Immigration and Customs Enforcement (ICE). Internal Revenue Service The Internal Revenue Service (IRS) reached an agreement with DHS to share the tax information of undocumented immigrants with authorities. "DHS can legally request return information relating to individuals under criminal investigation, and the IRS must provide it," per the agreement. Sharing the information could speed up immigration enforcement but may push undocumented immigrants to avoid paying taxes and turn to the informal economy. Department of Justice The DOJ is engaged in a number of headline-grabbing lawsuits over deportations. After admitting Kilmar Armando Abrego Garcia was erroneously deported, the DOJ is still pursuing the case to keep him in El Salvador. The administration invoked the Aliens Enemies Act to deport alleged Venezuelan gang members to El Salvador, defying a federal judge's court order. A federal judge Thursday ruled it unlawful. Mahmoud Khalil, a legal U.S. resident and a leader of Columbia's pro-Palestinian protests, is in ICE custody as the DOJ builds its deportation case against him. Social Security Social Security is also now an immigration enforcement tool. Hundreds of thousands of immigrants in the U.S. with "temporary parole" status — granted through various Biden-era programs — have received Social Security numbers to work. The Department of Homeland Security identified more than 6,300 of them who are on the FBI terrorist watch list, or with FBI criminal records, an official told Axios. Department of Housing and Urban Development HUD Secretary Scott Turner said last month that federal housing assistance will no longer be granted to undocumented immigrants or to " sanctuary cities" The department partnered with DHS to help identify undocumented immigrants living in publicly subsidized housing. Department of Transportation Transportation Secretary Sean Duffy said Wednesday that cities and states that give undocumented immigrants driver's licenses and those that are "sanctuary cities" will not receive federal funding. U.S. Postal Service The U.S. Postal Inspection Service, the USPS' law enforcement arm, has quietly started to cooperate with federal immigration officials in order to find undocumented immigrants, the Washington Post reported this week.
Yahoo
20-03-2025
- Business
- Yahoo
What's the average Social Security payment in Minnesota? See where the state ranks nationally
The average monthly payment collected by Social Security recipients in Minnesota is higher than in all but a handful of states. CNBC used the most recent Social Security Administration data to compile a list showing the average monthly payments received by beneficiaries by state. There are only six states with a higher average monthly payment than Minnesota. At least one poll shows that more than half of workers in the U.S. who have not yet retired are planning to rely on Social Security benefits to pay their necessary expenses once they do. However, it also found that most U.S. adults, whether retired or not, are concerned about receiving their benefits if the Social Security fund runs out. More: When can you get Social Security Social Security changes in 2025: How old you need to be for full benefits in Minnesota The CNBC report notes that average monthly payments can be skewed by a relatively small number of people who receive more or less than most recipients. Here's more about Social Security payments in Minnesota. The average monthly payment in Minnesota is $2,016, while the median payment is $1,982. More than 1.1 million people in Minnesota received a total of about $2.1 billion in monthly benefits in December 2023, according to the Social Security Administration. Here are the states with the highest average monthly payments. Connecticut ($2,114) New Jersey ($2,110) New Hampshire ($2,094) Here are the states with the lowest average monthly payments. Mississippi ($1,756) Louisiana ($1,759) Arkansas ($1,790) In 1983, Congress passed a law that gradually increased the full retirement age from 65 to 67 due to "increases in longevity and potential improvements in the health status of workers," a Congressional Research Service report says. Now, for anyone born in 1960 or later, the full retirement age is 67 years old – the age to reach to claim full Social Security benefits. However, it's possible to start getting Social Security benefits at 62 years old, but the payments won't be as much. To get higher payments, it's also possible to put off claiming benefits past full retirement age. The benefit increases by a certain percentage every month past full retirement age until age 70. This article originally appeared on St. Cloud Times: How much are monthly Social Security payments in Minnesota?
