A Proposed Bill called the "Social Security 2100 Act" was released on Thursday in the House, and it calls for major changes to social security. Parts of the bill are very favorable for some folks and other parts not so much. Here are the highlights:
- It changes the COLA to the Consumer Price Index for Elderly Consumers.
- It increases the point at which social security benefits become taxable. This has never been indexed for inflation and jumps to $50,000 for singles and $100,000 for married couples. This would eliminate taxation on a substantial majority of social security recipients.
- It increases "tier 1" benefits to 93% from 90%.
- It slowly increases the rate of taxation from the current 6.2% to 7.4% effective 2042.
- FICA tax will now apply to all earnings in excess of $400,000. You will continue to pay tax on the normal wage base and then if your earnings exceed $400,000, you will pay FICA on that excess.
- Additional "excess benefits" will accrue to those payments in excess of $400,000.
- Benefits will increase for lower-income taxpayers who work for up to 30 years.
Will this bill pass as it is? Highly doubtful; however, there is certainly a good chance that some type of major change to the Social Security System will happen over the next few years. We will keep you posted.