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Limit cost of living increases
The June 3 edition of The News-Enterprise contained a story about Social Security with questions answered by an array of officials.
The story indicated trustees project depletion of Social Security funds by the year 2033 — in 20 years. Once the reserves run out, incoming payroll taxes will cover roughly 75 percent of promised Social Security benefits, which would require an immediate 25 percent cut in benefits. This cut would reduce a monthly Social Security payment of $1,266 to $950.
The cost of living allowance increased by an average of 2.5 percent per year for the last 20 years. Compounded COLA percentages increased Social Security distributions by 63 percent. Similar COLA percentages in the next 20 years will increase the payments by 63 percent again. Reducing the COLA percentage to 1 percent per year for the 20 years will increase payments by 22 percent, which is 75 percent of the projected amount.
Social Security recipients need not fear a drastic future reduction of benefits. However, they should fear a Congress unwilling to make a good decision for all Social Security beneficiaries. Ask your representative in Congress to limit the COLA for 20 years, which still provides an annual increase in benefits while eliminating the projected shortfall.