With the 2020 presidential campaigns well underway, voters need to consider their own retirement security and how the candidates might affect it. Social Security, which provides one of the most important sources of income for seniors, is in financial trouble -- and it's very likely the next president will have to take action to shore it up.
Presumptive Democratic nominee Joe Biden has included some key details about how he'd handle the task in his recently released economic plan. If elected, Biden said he would make some big moves, including these three major changes.
1. Increasing minimum benefits
Social Security benefits are already progressive under the current system, with lower-income workers receiving benefits equaling a higher percentage of their average wages over their career than those with high incomes. Biden's plan would make them more progressive by "meaningfully increasing" minimum benefit payments.
Very few workers receive the Social Security minimum benefit under the current formula, and that benefit isn't very high (it was $886.40 in 2019). Moreover, an outdated formula for figuring it out means no new benefit recipients will qualify for it.
However, President Biden would change the rules by setting the special minimum benefit at 125% of the federal poverty level.
An earlier Penn Wharton analysis of Biden's plan as described on the candidate's website found this change would increase the minimum benefit between 5% and 50% for low-wage workers with work histories spanning 10 to 30 years.
2. Protecting surviving spouses from benefits cuts
The death of a spouse can be a major financial shock for retirees.
Under the current rules, a surviving spouse can keep the higher of the two benefits a married couple was receiving. However, if both spouses were receiving equal benefits, this could mean a widow or widower would see a 50% drop in household income upon a spouse's death.
Biden's plan would permit surviving spouses to continue receiving a higher portion of the couple's combined benefits than is available under current law. According to the candidate's website, this would raise monthly income by as much as 20% for affected beneficiaries.
3. Providing more money for long-term beneficiaries
Biden's plan also addresses the fact that many of America's oldest retirees face financial shortfalls.
The candidate would provide workers who have been getting benefits for at least 20 years with an increased benefit to help "protect retirees from the pain of dwindling retirement savings."
Those who have been eligible for benefits for at least 20 years would receive a 5% increase in their primary insurance amount which phases in at a rate of a 1% raise annually between the ages of 78 and 82.
Evaluate every candidate's Social Security proposals
Social Security hasn't been reformed since the 1980s, but lawmakers are running out of time to tackle the impending financial shortfall this popular entitlement program faces.
Whether you're voting for president or for your senators or representatives, be sure to find out what their plans are for reforming Social Security. Your retirement could depend on the decisions they make.