- Before becoming president, Joe Biden had a plan that would increase Social Security benefits to older people, which would boost any increase in the annual COLA
Many retired Americans are already looking forward to October, as the Social Security Administration will announce, like every year, how much the increase in the cost of living adjustment (COLA) will be for 2023. The increase in benefits is expected to be historic due to inflation. What few remember is that a proposal by President Joe Biden is in the air that would give more money to certain beneficiaries, and that it has nothing to do with the COLA.
During his campaign for the presidency, now President Joe Biden presented a proposal that sought to increase Social Security benefits for older Americans. Under the plan, monthly checks would increase for those retirees who have received benefits for at least 20 years, in addition to the corresponding annual COLA.
It is clear to almost everyone in the United States that the benefits you may receive from Social Security during your retirement will only restore a certain percentage of your usual earnings during your time as an active worker. And despite the fact that each year the Administration makes a calculation based on the inflation experienced by the country, known as COLA, the reality is that purchasing power will always fall short of the context in which it is lived, even when the beneficiaries receive the maximum payment for which they qualify at age 70.
President Biden, during his campaign, contemplated the fact that older people are those who may have more financial problems as they age: less purchasing power, less savings, decreased ability to work and more expensive medical care. . His proposal would seek to gradually increase workers’ benefits by 1% in the amount of primary insurance (PIA) beginning in the 16th year after they have claimed their payments and would continue until they reach 20 years with the benefit.
For example, if a worker will start claiming his benefits at age 65, starting at age 81, he would obtain an increase of 1% per year, to reach an increase of 5% at age 85. This would add larger amounts to the COLAs each year. Obviously, someone who claims their maximum benefit at age 70 would also defer their increases from age 86 to age 90.
However, as promising as this campaign proposal was, it is nowhere near being legislated. Neither the Biden administration nor Congress has made any recent mention of this adjustment to Social Security benefits.
So Social Security beneficiaries should continue to look forward to October to see how much the COLA will increase, thought to be the largest in 40 years. At the moment, there is no other way to receive more money in your monthly payments.
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