Users of these online tools should consider the source of their information and understand that the benefit estimates they produce are based on different underlying assumptions, which can result in different estimated benefit amounts.
This policy brief analyzes how applying the Social Security tax to employer-sponsored health insurance premiums could affect Social Security beneficiaries.
Specifically, the brief examines an option presented by the Social Security Advisory Board in which both employee and employer premiums would count as wages for Social Security tax calculations, and later for benefit calculations.
Using the Modeling Income in the Near Term model, the results show that for most Social Security beneficiaries aged 60 or older from 2017 to 2080, benefits would gradually increase and the poverty rate would decrease faster than the rate under current law.
Higher rates of poverty, disability, and mortality among African Americans mean that they are also more likely to rely on Social Security survivor and disability benefits than are other beneficiaries.
In conjunction with larger Social Security solvency plans, many policymakers have proposed introducing benefit increases for older beneficiaries.
This brief analyzes the projected effects of two such policy options on beneficiaries aged 85 or older in 2030 using the Modeling Income in the Near Term model.
Both options target older beneficiaries' primary insurance amounts for a 5 percent increase, but they differ in how the increase would be calculated.
The median percentage of benefit income owed as income tax by beneficiary families will rise from 1 percent to 5 percent over that period.Estimates are based on demographic information from the Survey of Income and Program Participation: individual earnings histories and projections of interest rates, wage growth, mortality rates, and disability rates.Historically, projections of mortality and disability trends.Survey profiles highlight each survey's history, design, and methodology; the categories with which each collects race and ethnicity data; and their strengths and limitations for analyzing Since 1984, Social Security beneficiaries with total income exceeding certain thresholds have been required to pay federal income tax on some of their benefit income.Because those income thresholds have remained unchanged while wages have increased, the proportion of beneficiaries who must pay income tax on their benefits has risen over time.