With the Social Security trust fund on the cusp of insolvency, the federal government is making some changes that would affect seniors today. One of these changes is phasing out a popular Social Security benefit that raises lifetime payments for American seniors.
It’s reported that the Obama administration is eliminating the “file and suspend rule,” which also gets rid of a loophole that helps seniors boost their retirement benefits by as much as $60,000. This means a considerable number of seniors will receive lower retirement incomes starting this week.
The file and suspend rule is used by married couples by “allowing one spouse at full retirement age (66) to file for benefits but immediately suspend collecting them.” This assists that person in giving their benefits a boost of about eight percent each year until they reach 70 years of age.
Despite its popularity, it is now becoming a necessary cut in order to help the Social Security trust fund to remain solvent. In fact, according to many experts, this could be the first of many cuts to the program over the next decade – unless Donald Trump becomes president as he says he doesn’t want any changes to the system.
According to estimates, 10,000 Baby Boomers are going to hit 65 every day for the next nine years. This means the costs to cover an array of Social Security benefits will skyrocket, especially since fewer younger workers are paying into Social Security. This is why so many people refer to Social Security as a Ponzi scheme because today’s workers pay for today’s retirees’ benefits.
Newsmax writes:
“If you’re 66 and getting Social Security, you can still apply under the file and suspend rule before April 29 by visiting an agency office or by calling (800) SSA-1213. You can also apply online at the Social Security Administration’s Website.
“Click on ‘Apply for retirement,’ fill out the application, type in the ‘Remarks’ tab, ‘Please suspend my benefits,’ complete the e-signature, and hit ‘Submit now.'”
More cuts to Social Security will transpire over the coming years. Eventually it will be bankrupt, particularly when interest rates skyrocket and the debt is too much to bear for the federal government.
Since not every family could use “file and suspend”, it needed to be axed. Also, the growth in future benefits needs to be adjusted. There was no COLA in Jan 2016, but my benefit estimate that I will start getting in 22 months, went up $30 per month, why? I have not paid any SS taxes in the last 10 years, my benefit should not be going up more than the COLA. Benefit estimates cannot continue to climb in years there is no COLA and should go up no more than the COLA each year. Also, the SS tax has not increased since the 1990’S. Employers have benefited by paying lower wages, so lower SS taxes, while doing away with many pension plans. The SS tax should be increased the same percentage as the COLA, until it reaches a total of 20%. This would be more in line with the windfall that many receive in benefits.