Biden also proposes several changes that I’d group together under the category of longevity insurance, with a goal of boosting benefits for older beneficiaries. This can be significant for clients who run the risk of running out of savings if they live to be very old.
A huge change when it comes to assessing a Social Security applicant’s annual cost-of-living adjustment and using various other measures geared to the types of inflation that would most likely plague seniors and their health care costs. The CPI-E, which would replace the CPI-W, is projected to boost the COLA by two percentage points annually compounding higher benefits.
Benefits for some surviving spouses also would get a boost under Biden’s plan. Currently, a surviving spouse is entitled to the full 100 percent of their deceased spouse’s benefit if it is larger than her own. However, if the two spouses benefit amounts earned are similar, the survivor still faces a cut in household benefit to the tune of around 50%.
If the new payment does not exceed the benefit received by a couple who both earn money with average career earnings (as far as the actual amount goes), the survivors would be given the option of receiving 75% of the original household benefit. Again, this is all under Biden’s plan. The basic premise is to cap the benefit to exclude those with extremely high incomes.
Furthermore, under Biden’s plan, a bonus equal to 5% of the average benefit to beneficiaries who had collected payments for 20 years, would also be paid out. This begins with a 1% boost for beneficiaries who had collected for 16 years.
All in all, expect some changes to social security under President Biden.