Social Security is intended to support America’s senior citizens. However, many senior citizens struggle to get by financially.
In 2019 alone, 8.9% of seniors had income below the poverty thresholds, according to the Congressional Research Service.
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In Congressional testimony in July 2020, Social Security Administration Chief Actuary Stephen Goss suggested that benefits could be 9.1% lower for this specific group, for life.
Goss stated that a decline in the average wage index would financially harm more than 4 million retired and disabled beneficiaries who will turn 62 in 2022.
The average wage index — which is calculated by Social Security to track wage growth in the overall economy — didn’t fall as once projected.
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Instead, the Social Security Administration recently posted that the national average wage index was up 2.83% in 2020 from 2019 — not down.
“That means that there would be no reduction to benefits for people who turned age 60 in 2020, those born in 1960. This is the good news,” said Mary Johnson, Social Security and Medicare policy analyst at The Senior Citizens League.
The Senior Citizens League is a nonpartisan group dedicated to protecting seniors’ benefits.
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Forbes reports that there are multiple ways seniors can maximize savings on their tax bill, including:
- Credit for the Elderly or Disabled: The IRS offers this tax credit to help lower a qualifying person’s overall tax bill. There are two types of people eligible for the credit: Those age 65 or older at the end of 2021 or those who are retired on permanent and total disability and have taxable disability income. The credit ranges between $3,750 and $7,500.
- Standard Deduction for Seniors: Most taxpayers take the standard deduction while filing their taxes, which automatically reduces taxable income without making any itemized deductions.
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Seniors who are 65 and older at the end of the tax year are eligible for a higher standard deduction than other taxpayers.
- Medical Expenses: Seniors with high medical expenses may benefit from doing an itemized deduction, rather than a standard deduction. They can deduct both medical and dental expenses that exceed 7.5% of their AGI, including insurance premiums, payments to Medicare and long-term care insurance premiums.
Keep up with more Social Security News here with us at the East County Gazette.
