Near retirees in Greater Baltimore are being beckoned by a billboard on wheels encouraging them to delay claiming Social Security. Baltimore is one of five U.S. cities where the National Committee has rolled out the “Delay and Gain” project, now in full swing. In addition to mobile billboards, the public education project is reaching out to older workers via radio ads, editorial content, and social media. The message is straightforward: workers who delay retirement can gain bigger Social Security benefits – extra income that they’ll need in old age.
One of the “Delay and Gain” mobile billboards visited Timonium, Maryland – just North of Baltimore – on Wednesday, eliciting supportive honks from motorists and curiosity from passersby. It’s one of the trucks spreading the message in cities like Baltimore, Pittsburgh, Detroit, and Louisville.
“Did you know that you can gain Social Security benefits by delaying retirement?” asked a National Committee volunteer passing out literature to shoppers and workers on lunch break in Timonium.
It’s a crucial message for today’s older workers. Nearly half of Americans surveyed did not know that they gain benefits by delaying claiming Social Security – or that they are penalized for claiming before the full retirement age of 66 (or 67 for those born after January 1, 1960). Even so, the average retirement age in Maryland is 64 — two years before Social Security’s full retirement age.
Workers’ monthly Social Security benefits are reduced by claiming at the earliest eligible age of 62 — and boosted up to 30% for waiting until the full retirement age of 66. Seniors who delay claiming until age 70 receive an even larger bump — up to 44% more than if they had filed for benefits early. For the average beneficiary, that can mean a difference of roughly $1,000 per month in extra income.
Maximizing Social Security benefits is important because the average monthly retirement benefit is about $1,460 or $17,500 annually. That’s only a few thousand dollars above the federal poverty line for individuals. Even with Social Security, some 8% of seniors under 70 live in poverty. (The poverty rate jumps to 12% for those over 85.) Older women are in greater peril than men, because they tend to live longer and have less retirement savings and lower Social Security benefits.
A recent Twitter poll by the National Committee tracks closely with previous data. A third of respondents say they plan to claim Social Security benefits between ages 62 and 64, despite the financial advantages of waiting.
Of course, older workers have their reasons for claiming early. Some cannot postpone retirement due to disability, age discrimination, or caring for family members. But others offer rationales that don’t make financial sense. Many near seniors say they’re sick and tired of working, not realizing they’ll be more sick and tired of not having enough money to pay the bills in old age. Others feel they must claim Social Security now, fearing it won’t be there for them in the future. And then there are those who try to calculate their “break even” point on lifetime benefits, thinking that they’ll receive a higher total payout over the years by claiming early.
The “Delay and Gain” project corrects these misguided notions by reminding workers that Social Security will be completely financially sound until 2035, and even then could still pay 80% of benefits – and only in the unlikely event that Congress takes no corrective action. To workers considering their “break even” points, the project reinforces that Social Security is income insurance, not an investment vehicle to be “gamed.” Workers should maximize their monthly benefits, which last their entire lives. People who reach age 65 today can expect to live nearly 20 more years – and will be happy to have the additional income in their elder years.
“We want seniors to be able to pursue a comfortable retirement, with the least amount of stress about paying the bills,” said Max Richtman, president and CEO of the National Committee. “This project will show older workers how to get there.”
Workers can use the Social Security Administration’s online calculator to determine benefit amounts at different ages.
The Trump administration has come out with yet another proposal to tinker around the edges of the prescription drug pricing problem without confronting it head-on. Health and Human Services (HHS) Secretary Alex Azar has issued a new rule requiring pharmaceutical companies to include drug prices in television ads.
According to the Associated Press, the ten most commonly advertised drugs range in price from roughly $500 to $17,000 per month “for a usual course of therapy.” While viewers may experience some sticker shock when they see these figures, putting prices in tv ads is not likely to push drug prices down. As a professor of health policy at Vanderbilt University told NBC News:
“Telling people what the price is doesn’t change the price. Instead, we would need to reform price setting or related to how patient payments are set.” – Stacie B. Dusetzina, Associate Professor Health Policy, Vanderbilt University Medical Center, 5/8/19
The Trump administration counters with the sketchy argument that the disclosures on television will compel patients to sit down and talk to their doctors about cheaper alternatives, supposedly putting pressure on Big Pharma to reduce prices. But talking to one’s doctor is not going to do the trick. Nor is switching to cheaper drugs always advisable for patients with chronic or serious diseases.
“Democrats say measures like price disclosure won’t force drugmakers to lower what they charge, and they want Medicare to negotiate on behalf of customers.” – NBC NEWS, 5/8/19
HHS must be able to exercise the power to negotiate drug prices with Big Pharma through the Medicare program. After all, who has more leverage – individual patients?… or the pharmaceutical industry’s biggest customer, the federal government?
The National Committee supports legislation in Congress to allow Medicare to negotiate prices directly with drugmakers. In February, Rep. Lloyd Doggett (D-TX) and Senator Sherrod Brown (D-OH) reintroduced their Medicare Negotiation and Competitive Licensing Act.
The legislation would authorize the Secretary of Health and Human Services (HHS) to negotiate drug prices. If drug companies refuse to negotiate in good faith, the bill would enable the Secretary to issue a competitive license to another company to produce the medication as a generic. – Statement from the office of Rep. Lloyd Doggett, 2/7/19
Unfortunately, the Trump administration does not support this proposal, preferring to offer ‘weak tea’ alternatives that won’t ruffle Big Pharma’s feathers too much. Meanwhile, the American people continue to suffer under a regime of sky-high drug prices. A recent Kaiser Family Foundation survey found that 60% of all respondents with chronic conditions had not filled a prescription or skipped doses during the past year. The figure jumped to 75% for patients with the highest insurance deductibles. We’ve heard the stories of seniors cutting pills in half – or having to choose between groceries and medicine – because drug prices are especially unaffordable for people on fixed incomes.
“Let’s cut prices so that patients don’t have to cut pills in half,” said Congressman Doggett in February. “Our proposal responds to an American problem, rampant prescription price gouging, with an American solution—negotiation and competition.”
Join the discussion about drug pricing information in tv ads on Facebook Live.
According to a new estimate based on the recent Social Security Trustees report, the Cost of Living Adjustment (COLA) for 2020 will be a scant 1.8%. That’s an increase of about $26 in monthly benefits for the average claimant. The same projection says that the Medicare Part B premium will likely rise by $8.80 per month next year. If both estimates prove accurate, the average beneficiary will only receive a net increase of $17.50 per month, which doesn’t buy much these days. As Bernice Napach reports in ThinkAdvisor:
“For recipients collecting $735 or less in benefits, the Medicare Part B premium increase would wipe out their entire COLA. They would have no additional funds to pay for rising costs for health care, housing or other necessities, which is an issue for a growing number of retirees.” – ThinkAdvisor, 5/1/19
If the 2020 COLA is, in fact, 1.2%, it would be the smallest benefit increase since 2017. (At 2.8%, the 2019 COLA was one of the highest of the past ten years.) For three of those years, the COLA was zero.
Of course, the COLA is supposed to cover the cost of inflation from year to year. But under the current formula, the CPI-W (or Consumer Price Index for Wage earners), it usually doesn’t. That’s because the CPI-W does not accurately reflect the inflation rate for the goods and services that seniors spend money on. For example, seniors spend roughly twice as much on medical care as younger adults, but the CPI-W does not take that into consideration. On the other hand, retirees don’t drive as much as working-age people, but the CPI-W fluctuates with the cost of gasoline. If the price at the pump falls, so do seniors’ COLAs.
The National Committee believes it’s time to adopt a better formula for calculating cost-of-living adjustments for retirees: the CPI-E, or Consumer Price Index for the Elderly. The CPI-E is based on retirees’ actual spending habits rather than those of the general population. Costs like food and transportation are de-emphasized, while inflation in housing and medical costs is given greater weight.
Three pieces of legislation have been introduced in the 116th Congress that would implement the CPI-E for calculating Social Security COLAs. The National Committee endorses all three:
Social Security 2100 Act (Rep. John Larson)
Social Security Expansion Act (Sen. Bernie Sanders)
CPI-E Act (Rep. John Garamendi)
A 2019 study released by the federal General Accounting Office (GAO) found that if COLAs had been based on the CPI-E during the years 2003–2033, by the end of that 30-year period a beneficiary who earned the average national wage would receive $100 (or more) in additional monthly benefits. An extra $100 doesn’t sound like a lot, but think of the expenses it could help cover for seniors living on fixed incomes.
Telephone and internet service
A more accurate COLA formula would increasingly benefit retirees over time: the larger the benefit this year, the higher it will be the next year when the percentage increase in the COLA is applied. (This is known as a ‘compounding effect.’) Conversely, inadequate cost-of-living adjustments – especially when offset by increases in Medicare premiums – erode seniors’ buying power over time. There is no question: the CPI-E represents a superior alternative for seniors, especially the 50% of retirees who depend on Social Security for all or most of their income.
For more on COLAs and CPI-E, watch Behind the Headlines on Facebook Live.
After holding three public hearings on Social Security’s future, Congressman John Larson has taken his campaign to boost benefits on the road. The latest stop: Las Vegas, Nevada. Rep. Larson (D-CT) held a town hall yesterday at the city’s Doolittle Senior Center with Congressman Steve Horsford (D-NV), National Committee government relations and policy director Dan Adcock, and other advocates. Some 100 seniors gathered to listen and ask questions, just one day after the Social Security Trustees issued their annual report showing the program’s financial outlook improving since last year.
Congressman Larson seeks to build public support for this Social Security 2100 Act (cosponsored by Rep. Horsford), which would put the program on a sound financial footing for the rest of the century – while boosting benefits and providing retirees with tax relief.
The average Social Security retirement benefit in Nevada is $1,378 – or $16,500 per year, about $1,000 below the national average.
“So many Americans contribute to Social Security all their lives, yet so many of them retire into poverty. Most of them are women and the majority are women of color.” – Rep. John Larson, 4/23/19
“Social Security isn’t an ‘entitlement,’ as it’s often called. These are not government giveaways … This is something you’ve earned and deserve.” – Rep. Steve Horsford (D-NV), 4/23/19
Rep. Horsford related a personal story to help illustrate how crucial Social Security benefits are to older Americans with fixed incomes. As the Nevada Current reported, “When he was nine weeks old, his grandmother had a stroke that put her in a coma for six months and left her paralyzed on her left side.”
“Here is my mother, still a teenager… taking care of a sick mother and a baby. My grandmother needed round the clock care and was put into a nursing home to get the care she needed. Social Security Disability and Medicaid made that possible.” – Rep. Steve Horsford, 4/23/19
Dan Adcock says that the audience appeared to be overwhelmingly supportive of Congressman Larson’s bill, and suspicious of conservative ideas regarding Social Security’s future. Moderator Debra A. Toney of the Nevada Health Centers asked Adcock about proposals to raise the retirement age.
“Regardless of whether you live to 50 or 100, raising the retirement age is a benefit cut. Raising the retirement age also disproportionately affects workers with physically demanding jobs who cannot continue working and claim benefits early. We believe that raising the retirement age is a bad idea – and that it is unnecessary for extending the solvency of Social Security. That’s why we endorse the Social Security 2100 Act.” – Dan Adcock, National Committee legislative director
At the end of the town hall, Adcock presented Rep. Horsford with a pair of the National Committee’s signature red boxing gloves, signifying that the Congressman is a ‘Social Security champion.’ “These will help you in your fight for seniors in the U.S. Congress,” Adcock said.
Social Security’s financial health is on the upswing, according to today’s report from the Social Security Trustees. The system’s reserves are now projected to last until 2035 (a full year longer than last year’s report projected), with the government able to pay 80% of benefits after that time – but only if Congress does nothing to fortify Social Security’s finances. This year, Social Security will take in more than it pays out. As a result, the asset reserves of the combined trust funds will increase by $3 billion in 2018 to a total of $2.895 trillion. Here are some of the Trustees’ other key findings:
- Social Security’s projected actuarial deficit over the next 75 years has shrunk from last year’s projection – from 2.84% to 2.78%.
- The program’s $6.7 billion in administrative costs was a “very low” 0.7 of total expenditures.
- The combined Trust Fund asset reserves earned an effective annual interest of 2.9% in 2018.
“This year’s Trustees report shows that, contrary to conservative propaganda, Social Security is not ‘going bankrupt’ or ‘in peril.’ The system’s financial health has improved over last year, and Congress now has before it two landmark pieces of legislation that could put Social Security on a sound financial footing for the rest of the century — and provide seniors a modest benefit boost and tax relief.” – Max Richtman, National Committee president
The National Committee endorses Rep. John Larson’s Social Security 2100 Act and Senator Bernie Sanders’ Social Security Expansion Act. Both bills ask the wealthy to pay their fair share to strengthen Social Security, something overwhelming majorities of the American people support in poll after poll.
The Trustees of the Medicare program report that the federal senior health care program’s finances look about the same as they did in 2018. Medicare’s Part A trust fund will become depleted in 2026, at which time the system still could pay 89% of benefits. But, again, this is only if Congress takes no action to bolster Medicare’s finances.
“The National Committee supports legislation that would reduce Medicare’s costs – especially allowing the government to negotiate prescription drug prices with Big Pharma – while expanding seniors’ health benefits. Again, we call on the Trump administration and Congress to act swiftly to effectuate common sense solutions without jeopardizing the health and security of seniors. The 2019 Trustees report should take the wind out of the sails of conservatives who want to ‘reform’ Social Security and Medicare through benefit cuts.” – Max Richtman