$1,358 up to $1,657 for all Social Security. Beneficiaries, have you heard about this? Well, I have all the details and everything you need to know right here on this topic.
All right, So I think many of us can probably agree Social Security has some pretty big problems ahead of them, especially with the rapid expansion of this very important program. Well, in fact, as of right now, there are about 100 Americans who are becoming eligible for Social Security benefits every single day. Not to mention the labor participation rate is sitting around 60%, which means less people working, less people paying in through Social Security payroll taxes, and less money going into the Social Security trust fund. At the same time, just like what I talked about in one of the topics yesterday.
As of right now, they are projecting a massive cost of living adjustments, otherwise known as Cola rays for next year in 2023, which once again will deplete the actual trust funds a little bit faster and add even more strain onto the trust funds. Well, believe it or not, as of right now, there are some ideas that are floating around out there to increase the solvency of the Social Security trust fund and make sure that they can continue to pay out promised guaranteed benefits for many, many more decades to come by raising benefits. Wait, what? Yeah. Weird, right?
As I am your one and only daily advocate, and I am very much dedicated to you in this community to do all the research and to break it all down into these short topics so that you can stay updated with everything going on right now as this information is changing rapidly and as it is being released. All right, So I do want to talk about this because I do completely recognize that a lot of you right here in this community are fixed income beneficiaries. So we’ve got to continue watching these programs very closely because usually on an annual basis, as in every single year, Social Security does typically make some changes which ultimately will impact Beneficiaries. And we all know about the solvency issue out into the future about ten years from now.
But again, that’s a very long time from now. We don’t really need to worry about it. However, there is an interesting concept that’s floating around out there right now that I do want to discuss in this video because honestly, it’s a very interesting concept. Not really sure if it’s going to get any attraction or if it’s just something that somebody was playing around with. But either way, I do want to share it with you.
So basically what the whole idea is a flat Social Security benefit. Wait, sounds kind of weird, right? Well, it’s kind of basically like turning Social Security into a guaranteed basic income program. Now, again, it’s not what it is right now. Social Security is certainly not a flat Social Security benefit or it is not a guaranteed basic income program.
But if they were to implement this, it’s basically what it would turn into at some point in the future. Let me tell you the details on this. So basically, what the idea is floating around out there is to essentially establish a flat Social Security benefit. So here’s what would happen. The lower-income and lower beneficiaries, those people who are getting lower benefits over long periods of time each year, your benefit would be bumped up.
Now, again, I do totally recognize right now your benefits are already bumped up because of the annual cost of living adjustment. But that’s not what I’m talking about here. I’m talking about something completely separate. So the idea is to actually make sure that over long periods of time that all the benefits come together and meet at equilibrium right in the middle, therefore making everybody’s benefit essentially the exact same amount. So here’s how this process would work.
The lower-income beneficiaries on an annual basis, your benefit will be bumped up a little tiny bit. And those people who are higher beneficiaries, their benefit would actually be notched down a little bit Right, And again, the whole idea would be to arrive at a median benefit on an annual basis or sorry, on a monthly basis. So basically what it comes out to is those people who have a benefit below the median monthly benefit would be ratcheted up each and every year.
Meanwhile, those people who have a benefit larger than or bigger than the annual or sorry, the monthly benefit would actually be brought down a little bit each and every year. And over a long period of time, they would meet at equilibrium. In other words, right in the middle at the median monthly benefit. Kind of makes sense. So let me give you a quick example.
Let’s just say, for example. Well, actually, let me give you real numbers. Here the numbers that I mentioned at the beginning of the topic. As of right now, in 2022, the average SSDI beneficiary is getting $1,358. That’s the average.
I know that a lot of you here in this community who are receiving SSDI are probably not getting that amount because honestly, I’ve seen benefit amounts down in the comments section. And I can’t say that I’ve ever seen 1358 in the comment section. And again, I don’t want to know your benefit. So please don’t share that with me. It’s not my business and it’s nobody’s business.
What your benefit is. But my point is that seems like a pretty high benefit. But anyway, that’s what they’re telling us. The average is right now in 2020, 1358 for an SSDI beneficiary.
However, when it comes to Social Security retirement benefits, they’re telling us that the average benefit right now is $1657, $1,657 every single month for Social Security retirement beneficiaries. So as long as we have these numbers right here in front of us, let me give you a quick example. Let’s just say, for example, a retiree again, Social Security retirement benefit. And again, I’m just throwing out this as an example to show you and illustrate how this would actually work. So here’s what it comes down to.
Let’s just say the median benefit right now is $1657, which by the way, average and medium or median are two totally different numbers. The average benefit is different than the median benefit. But let’s just say for this example, the median benefit is $1657. So here’s what happened. Basically, over long periods of time, anybody with a benefit under $1657 would be brought up a little bit each and every year.
Meanwhile, those beneficiaries with a benefit over $1657 would be brought down a little bit each and every year. And over a long period of time, according to what the reports and everything that I’ve been reading on this, they’re actually projecting about 30 years is what it would take place for this to actually happen. So you can see here a very, very long period of time. So over about that 30-year time frame, the lower beneficiaries would be brought up, the higher beneficiaries would be brought down a little bit each and every year. And then ultimately, after about 30 years time, give or take probably a few years, it would arrive at a median number, the median benefit amount.
So what is the median amount? You might be wondering that. So basically what they do is they take all the benefits. So about 65 million benefits, you basically lay out all the benefits and then you choose the middle number. That’s essentially what it would be like when you’re driving down the road.
You got four lanes of traffic, two on each side and down the middle, you have maybe like a little cement barrier. That’s the median, right? It’s the median. It’s the middle, right. So that’s exactly what the median is.
So it’s the same thing with Social Security benefits. Basically, if they were to lay out all 65 million benefits and they went in from both sides equally, one from the left, one from the right, back and forth, and all of a sudden they arrived at the middle number. That is the median anyway. So that’s why I’m saying the median and the average are two totally different numbers. But again, I was just using that 1657 as a median number just to kind of give us an example to kind of show you how that would actually work.
So anyway, this is basically one idea that’s floating around out there to actually increase the solvency of the program. I guess I’m going to be totally honest with you. I’m not really sure how this would actually increase solvency, because if you’re raising benefits for the lower-income beneficiaries and you’re reducing benefits for the higher-income beneficiaries, wouldn’t it all average out to be the same? I don’t know. I’m not a mathematician, but in my simple mind, it seems like that would all average out to be about the same.
Maybe I’m wrong, but again, that’s just kind of what I’m figuring in my head. But anyway, that’s just what they’re calculating. Also, basically, what this would do to Social Security, it was to basically turn it into a guaranteed basic income program. Now, of course, I know that we are all very defensive of our Social Security benefits. Don’t get me wrong.
You should be right. You’ve earned your benefit. You’ve spent years and years and years working paying in thousands and thousands of dollars in payroll taxes. You’ve earned the work credit you put in the time you earn the benefits. Don’t get me wrong.
You’re very defensive and I totally get it. Many people are defensive of their Social Security benefits, and you should be. They’re very sacred benefits. They’re very important benefits that you have spent years and years to earn. Now, here’s the thing.
Why this would turn into a guaranteed basic income program is because essentially over a long period of time, when all these benefits, when this may actually take place, we may have probably 75, 80, 90, maybe 100 million people at that point. Again, a couple of decades from now, we may have 100 million people drawing on Social Security benefits at that time. If everybody gets the exact amount of benefits every single month, whatever it happens to be at that time, let’s just say it’s $2,500. Everybody gets $2,500, right.
And who knows what it will actually be at that point, but it’s going to be much higher than the 1657 we’re talking about in this video as an example.
So whatever actually happened to be and again, if everybody gets the same amount, that’s exactly the definition of a guaranteed basic income program. Sending out a specified group of people, the exact same amount of money on an ongoing basis with no strings attached, that’s exactly what it would be. Right? So I don’t know. It’s probably a little bit of a controversial topic.
And realistically, if something like this were to happen, it likely wouldn’t even happen for many years. And in the event that this would happen, according to the reports and everything I was reading about this, they were saying anybody who is currently drawing on Social Security, this would not impact them in any way, shape or form because it would take so long to actually implement that. It would be so far out into the future that anybody receiving right now wouldn’t even be phased by this in one bit at all. So anyway, I’d be curious to hear from you. If you’re comfortable sharing.
What are your thoughts on this? Do you love it? Do you not like it? Do you think it’s a great idea. Do you think it’s a terrible idea?
I don’t know. I came across and I thought, oh, that’s interesting. I want to be honest with you. I don’t really think a lot of people would be in support of this because, like I said, everybody’s essentially getting a different benefit. Some people are getting $820 a month, some people are getting 2000, some people are getting $4,000 or more.
So I’m guessing the lower-income beneficiaries would probably think, hey, this is a great idea. I like it. Let’s boost my benefits. And Meanwhile, maybe those people receiving $4000 or more dollars a month would say, no, I don’t want to do this. I don’t want my benefits to be reduced.
So I’m guessing it’s probably a little bit of a touchy subject, which, by all means, it should be. Anytime that it comes to touching our benefits, whether it’s raises to them or decreases to our benefits, anything that pertains to our benefits, adjusting them, I think all of us are feeling probably a little bit like, hey, don’t touch it, right? It’s my life. It’s my livelihood. It’s my money.
It’s my future. It’s everything about my life. Right? So, yeah. Anyway, that was a pretty interesting report.
Make sure to leave your comments and questions down below if you’re interested in doing so. And if you are comfortable doing so otherwise, share this topic with your friends on your social media. I hope this one helps you out and gives you a glimpse into what is actually going on and what they’re actually discussing out there right now in regards to Social Security benefits. All right, thanks again.
Enjoy your day and I’ll catch you again later in the next.