One organization likely to see some change by 2024 is the Social Security Administration (SSA), on which millions of senior Americans depend. The reason for this change is that the Social Security Old-Ages and Survivors Insurance Trust (OASI) may run out of sufficient funds by 2033, which would mean they may not be paid full benefits until 2024.
To remedy the situation, a variety of proposals have emerged, and one of those in constant debate is Joe Biden, the current President of the United States, who has proposed a “radical four-point plan” to consolidate funds in the trust. suggested. and thus avoid funding shortfalls at the middle level within the Social Security Administration.
These changes can affect everyone from the highest income earners to those earning the average salary in the United States. Even the lower class people could see its effect.
The offers are locked in four plans, which we are going to explain in Solo Dinero:
1.- Payroll tax for income over $400,000
Under applicable laws in the United States, taxes must be paid on all income below $160,200 and the percentage paid to the Internal Revenue Service is 12.4%. Income above this amount is not required to pay Social Security taxes. Biden’s proposal would change this, and in fact, he intends to start collecting this tax at $400,000.
2.- A different method to calculate COLA
Currently, retirees receive an annual increase in their income, thanks to a cost of living adjustment (COLA). It is calculated on the basis of inflation and the Consumer Price Index for Urban Salaried and Administrative Employees (CPI-W) is taken as a reference. What many experts have to say is not in favor of older adults.
Now, what is being proposed is that COLA would be calculated for the elderly in a different way based on the Consumer Price Index, which measures the needs of the elderly.
3.- Increase in primary insurance amount
Known by the abbreviation of PIA in English, Primary Insurance Amount is a figure that shows how much money Social Security beneficiaries will get, the age from which the income starts to be claimed as well as the amount they have to pay in a month. earned. month in his last 30 years of work.
