I don’t know how you guys get by without fear of being misled by Social Security stories you read in newspapers or see online. Because I know the subject so well and because I can decipher the confusing and sometimes scary Social Security-related clutter out there, it doesn’t bother me. But I can see where a layman in Social Security might be concerned or fooled by so much of what you see in print or online.
Just last week, I wrote a column trying to clarify the points made in a column headed, “Social Security Mistakes That Can Cost You a Fortune.” Almost all the information in that column was pretty mundane stuff that most people already know. And even if we didn’t know them, it wouldn’t have led to a series of unfortunate mistakes.
And just a few hours after submitting that column to my editors, I read the online version of a major national newspaper and saw this headline: “Beware Seniors: 4 Major Social Security Changes Coming in 2023.”
In fact, when I first read that headline, I panicked a little. I thought, “Oh my gosh! I’m always up to date on this Social Security thing. And I haven’t heard anything about Congress making major changes to Social Security going into effect next year!” So I could only imagine the confusion and perhaps the fear that such a headline could cause most retirees.
But then I opened the story and read it. Guess what? These “major changes” are just routine updates that happen every year in the Social Security program. So why the provocative and misleading headline? Somehow I get it. If the newspaper had used the headline, “Routine and Boring Social Security Updates for 2023” — well, no one would have read that story. But the striking headline “big changes” attracts people (including me). It does work. But it remains misleading.
So, what are the “big changes” coming in 2023? First of all, of course, there is the annual cost of living adjustment (COLA) in January. And because inflation is soaring, the next COLA will be high as well. It should be around 10%.
Rather than just announcing the upcoming COLA, this national newspaper could have done their readers a real favor and answered the question everyone is asking me. And that question usually goes something like this: “I planned to wait until I reach full retirement age later in 2023 to apply for my Social Security. But I want to get the benefits of this expected big COLA. So, do I have to apply for reduced early benefits in 2022 in order to receive the 10% increase in my benefit in early 2023?”
And the answer is no. If you don’t get benefits when the COLA comes out (i.e. in January 2023), the same COLA increase is built into the Social Security benefit formula for future Social Security recipients.
The next “big change” the paper proclaimed is the routine and annual increase in the wage base – the amount of income subject to Social Security payroll taxes. That cap is $147,000 this year and will automatically increase next year (based on increases in the average national wage) — as it has increased every year for the past 30 years.
Of course, this change won’t affect most people reading this column. It only affects those who are still working and earning more than $147,000 a year. So if you’re in that boat, I think you could classify this as a “big change.” But it is by no means a surprise or an unexpected change.
The third “big change” the newspaper report talked about is the increase in the retirement age. I mean, come on: is this news? Absolutely not. The law raising the retirement age from 65 to 67 was passed in 1984. And that has been introduced gradually over the past 40 years. We have now reached the point where the retirement age is 66 and 6 months for people born in 1957, and those people will reach that “full retirement age” in 2023. But I challenge the editors of that newspaper to find me one reader and potential retiree born in 1957 who did not know that this was his or her full retirement age.
And finally, the fourth “big change” is the increase in income penalty limits for Social Security recipients below full retirement age who may be working part-time. The limit is currently $19,560. For every two dollars you earn above that limit, one dollar is withheld from your Social Security benefits. But again, the update to the limit is an automatic increase that has happened every year for the past 30 years. It does not matter. It’s not a big change. And frankly, it’s just not news.
And when we talk about misleading Social Security related “news” stories, sometimes they are so downright silly that I hope most of my readers can understand that they are completely fake.
For example, there were many reports — all from the same questionable source — as I write this (early August) with headlines similar to the ones I saw: “Biden authorizes border patrol officers to hand out Social Security cards to ‘illegal immigrants’.” crossing the Mexican border.”
Oh yeah. And did you know that cops also give undocumented workers a Wells Fargo Visa card, interest-free mortgages, a new car and a box of chocolates? I mean, come on people, get real. This is not happening and I hope all my readers are smart enough to realize that.
I know some people like to think of the federal government as a huge, monolithic entity in which all employees are just bureaucrats following the mantra of an appointed leader. That’s just not how it works. There are hundreds of federal agencies, each with their own staff and mission. For example, you obviously don’t go to the Department of Agriculture to file your federal tax return; you would go to the IRS. You wouldn’t go to the FBI and try to get a national park pass; you would go to the National Park Service. And you wouldn’t go to the US Customs and Border Patrol to get a Social Security number; you would go to the Social Security Administration. (And by the way, if you entered this country illegally and you tried to get a Social Security card from the SSA, you just wouldn’t get one!)
If you have a Social Security question, Tom Margenau has a book with all the answers. It’s called ‘Social Security: Simple and Smart’. You can find the book at www.creators.com/books, or search Amazon or other bookstores. Visit the Creators Syndicate website at www.creators.com to learn more about Tom Margenau, read past columns and see features from other Creators Syndicate writers and cartoonists.
Photo credit: meineresterampe on Pixabay