MILLIONS are expected to receive up to $361 more in benefits every month in 2023.
The Senior Citizens League (TSCL) has confirmed to The Sun its 2023 COLA estimate is at 8.6 percent.
The 8.6 percent increase would mean that the average benefit would climb by about $143 per month to $1,800, whereas the maximum would jump by roughly $361 to $4,555.
However, there are still four months of data to come in between now and October 2022, which is when the Social Security Administration (SSA) announces the COLA amount.
Read our COLA 2022 increase live blog for the latest news and updates...
Some children can claim for SSI without parents
While children will need to qualify for Social Security benefits through their parents, SSI is available for certain children regardless of their parent’s situation.
Children under age 18 qualify for SSI under the following circumstances:
- The child must have a physical or mental condition(s) that very seriously limits his or her activities;
- The condition(s) must have lasted, or be expected to last, at least one year or result in death.
How children’s benefits work
If an eligible parent passes away, children can receive benefits as long as they meet the same qualifications on age, disability, and marital status.
Children with retired or disabled parents can collect a benefit worth 50 percent of their parent’s full benefit, or 75 percent if their parent is deceased.
The highest monthly benefit of Social Security is currently $4,194, so children can receive a maximum of $3,145.50.
These benefits can also be claimed by spouses.
How kids can get SSI benefits
Once a parent has worked for 10 years or otherwise earned Social Security eligibility, their children are eligible for benefits if:
- The parent is either disabled or retired
- The child is unmarried and younger than 18
- The child is 18 or older and has a disability that began before they turned 22
- The child was previously receiving at least half of their financial support from the qualifying parent
Death of a spouse, conclusion
Also, keep in mind, that you do not have to claim your spouse’s benefits immediately after the death occurs.
You could delay the claim until you reach your full retirement age.
In terms of how much you can get, let’s say that you are earning the average Social Security payment of $1,657 and your deceased spouse got this year’s maximum benefit of $4,194.
That’s a difference of more than $2,500.
Death of a spouse, part three
The closer you are to age 60, the fewer survival benefits you are eligible for.
But once you reach your full retirement age, you can get 100 percent of your deceased spouse’s benefit.
Your full retirement age is 66 or 67, depending on the year you were born in.
Death of a spouse, continued
This is a part of survivor benefits, which a widow or widower can get if they are age 60 or older.
The benefits would range from 71.5 percent to 100 percent of your deceased spouse’s retirement benefit depending on age.
What happens when your spouse passes away?
When a spouse passes away, the impacted widow or widower can claim a $255 lump sum payment.
Additionally, it’s possible your monthly benefit can increase if you were earning less in Social Security benefits than your deceased spouse.
Mitch McConnell on Social Security, continued
Scott’s proposal would compel Congress to vote on reauthorizing Social Security and Medicare on a regular basis, per Motley Fool.
It would cause significant uncertainty for seniors and might cause issues for future retirees, who wouldn’t be able to rely on Social Security to support them.
However, McConnell rejected this proposal, implying that a Republican Senate majority would not constitute a substantial immediate danger to Social Security.
Mitch McConnell on Social Security
Senate minority leader Mitch McConnell recently spoke about the future of Social Security, in response to a plan proposed by Senator Rick Scott about what the GOP might do if they take control of Congress, according to The Motley Fool.
He said: “I’ll decide in consultation with my members what to put on the floor.
“We will not have as a part of our agenda a bill that raises taxes on half the American people and sunsets Social Security and Medicare within five years.”
Understanding COLA, concluded
Inflation rates throughout the 1970s varied from 3.3 percent to 11.3 percent. In 1975, the COLA was increased by 8 percent, while inflation was at 9.1 percent.
In 1980, the COLA hit its highest point in history, at 14.3 percent, against a 13.5 percent inflation rate.
Small COLA increases of 2 percent to 3 percent per year were common throughout the 1990s, thanks to dramatically reduced inflation rates.
Even lower inflation rates in the early 2000s resulted in no COLA adjustments in 2010, 2011, and 2016.
Understanding COLA, continued
In 1975, Congress adopted a COLA provision that provided automatic yearly COLAs based on the annual increase in the CPI-W.
Prior to 1975, Congress enacted special legislation to boost Social Security payouts.
COLAs in 1975 were calculated using the rise in the CPI-W from the second to the first quarter of 1974.
They were based on increases in the CPI-W from the previous year’s first quarter to the current year’s first quarter from 1976 to 1983; since then, COLAs have been based on the CPI-W from the previous year’s third quarter to the current year’s third quarter.
Because inflation was significant in the 1970s, COLAs were utilized to safeguard compensation-related contracts, real estate contracts, and government benefits.
The CPI-W is determined by the Bureau of Labor Statistics (BLS), and it is used by the Social Security Administration (SSA) to calculate COLAs.
The COLA formula is calculated by multiplying the percentage rise in the CPI-W from one year’s third quarter to the next year’s third quarter.
On the SSA website, this information is updated on a regular basis.
When did Social Security begin?
Franklin D. Roosevelt signed the Social Security Act on August 14, 1935, according to the Social Security Administration.
In January 1937, taxes were initially collected, and the first one-time lump-sum payments were paid in the same month.
In January 1940, regular monthly rewards were established.
Social Security credits, continued
You can get a maximum of four Social Security credits each year, and you must earn $6,040 to get the maximum of four credits.
Therefore, to earn 40 credits you must work for at least 10 years.
You are able to earn more than 40 credits.
However, 40 credits is the minimum number you need to be eligible for Social Security benefits.
What are Social Security credits?
To collect Social Security benefits, you must have met the minimum requirement of performing “enough work.”
The Social Security Administration (SSA) defines “enough work” as earning 40 Social Security credits.
In 2022, an individual will earn one Social Security credit for every $1,510 in covered earnings.
Increases on resource limits
The resource limit for households will increase by $250 to $2,500 for the continental states and the District of Columbia, Alaska, Hawaii, Guam, and the US Virgin Islands.
The resource limit for households where at least one person is age 60 or older, or is disabled, will also increase by $250 to $3,750.
Four changes every year
There are at least four changes that occur every year when it comes to Social Security:
- Cost-of-living adjustments
- Earnings test limit
- The value of a work credit
- Social Security tax limit
SS Benefit Eligibility Screening Tool, conclusion
While none of the questions are very tough, you should be prepared to provide some information before completing the questionnaire, such as:
- Work-related annual earnings.
- Other sources of annual income
- All of your assets’ total value.
- Date of beginning of disability
BEST, according to DisabilityBenefitsCenter.org, isn’t a Social Security Disability application. Your responses are kept fully private. You won’t be asked for your name, social security number, or contact information at all.
SS Benefit Eligibility Screening Tool, continued
To utilize the BEST, you must first complete a questionnaire regarding the advantages you may be eligible for.
The choices are as follows:
- Disability assistance
- Family benefits
- Spouse & widow(er)
- Supplemental Security Income (SSI)
- Veterans benefits
SS Benefit Eligibility Screening Tool
A Benefit Eligibility Screening Tool (BEST) is a collection of questions on the Social Security Administration’s website that might help you figure out if you’re eligible for Social Security Disability benefits.
It also assists you in determining the Social Security Disability benefits you are likely to be eligible for.
What was the 2021 COLA?
The 5.9 percent cost-of-living adjustment (COLA) for 2022 is a big jump from the 1.3 percent COLA in 2021.
The significant increase was driven by a rise in inflation over the past year.
The future of Social Security
According to the Social Security Board of Trustees’ 2021 annual report, the agency’s financial reserves will be drained by 2034, a year sooner than its 2020 report predicted, Yahoo reports.
After then, annual taxes are estimated to pay just around 78 percent of the benefits.
Longer life expectancies, a smaller working-age population, and an increase in the number of retirees are all contributing to the problem.
By 2035, the number of people aged 65 and more in the United States will have risen to more than 78million, up from around 56 million now.
As a result, more individuals will be withdrawing money from the Social Security system, while fewer will be contributing.
SS mistakes to avoid: claiming too early or waiting too long
If you claim as early as possible, which is the age of 62, your benefit amount will be permanently reduced by up to 30 percent.
Should you decide to claim until your full retirement age (FRA), you’ll get 100 percent of the monthly benefit.
If you delay benefits up to the age of 70, you can get an extra 32 percent each month.
However, you do not want to wait too long to claim where you end up putting yourself in a difficult financial situation.
Maximizing earnings for a larger payout
It’s usually a good idea to review your Social Security earnings around the halfway point of the year.
Your final Social Security payout is determined by a mix of when you apply for benefits and how much you earn over the course of your working lifetime.
Only your 35 greatest years of earnings are counted by the Social Security Administration, and only earnings up to the yearly Social Security salary base are used to calculate your benefits.
You’ll need to earn up to the yearly salary base for those 35 years if you want to get the highest potential Social Security payment when you retire.
The Social Security pay base for 2022 is $147,000.