Although you should be thrilled with the prospect of a 3 percent or better COLA increase I’d caution you not to pop the cork on the champagne just yet.
The Social Security Administration estimates that 21 percent of married couples and 43 percent of single seniors rely on Social Security for 90 percent or more of their income. With the average check being $1,404 a month it’s pretty tough.
Currently 94 percent of us who earn under the $128,400 threshold will pay Social Security tax every paycheck for the entire year. But for the lucky 6 percent who earn over that limit they have over 2 trillion dollars in earning that escape Social Security taxation. Plus, those that have unearned income — such as dividend income and capital gains — also escape taxation.
Uncapping the limit to include all income would generate over 1.5 billion over the next 10 years.