WASHINGTON, April 4 – Low-income Americans are dying younger than their higher-income peers and are losing out on earned Social Security benefits, according to a new study prepared for Sen. Bernie Sanders by the Government Accountability Office.
As a result of growing disparities in life expectancy between the rich and poor, the progressive effect of Social Security is eroding. American men making about $20,000 a year are expected to lose 11-14 percent of their lifetime Social Security benefits, according to the report. In contrast, men making about $80,000 a year are expected to see their benefits increase as much as 16-18 percent due to their longer life expectancy.
Raising the Social Security retirement age would result in even fewer benefits for lower-income groups, the study found. Lower-income men are living between 4 and 13 fewer years than higher-income men, and lower-income women are living between 2 and 14 fewer years than higher-income women.
“Poverty should not be a death sentence,” Sanders, the ranking member on the Primary Health and Retirement Security Subcommittee, said. “When over half of older workers have no retirement savings, we need to expand, not cut, Social Security so that every American can retire with the benefits they’ve earned and the dignity they deserve.”
The wealthiest Americans are not only living longer and collecting more in Social Security benefits, they are also contributing less of their income toward Social Security. Almost all of the income gains over the past three decades have gone to those earning above the $118,500 earnings cap and have therefore been exempt from Social Security taxes, costing the Social Security Trust Fund over $1.1 trillion.
“Today, the wealthiest Americans contribute less to Social Security than at any other time in recent history. We must reject calls to raise the retirement age and instead strengthen Social Security by ensuring millionaires and billionaires pay their fair share,” Sanders said.
Sanders has introduced legislation that would ensure that Social Security would be able to pay every benefit owed to every eligible American for the next 58 years. His plan would increase benefits by more than $1,300 a year for seniors with less than $16,000 in annual income. This includes boosting yearly cost-of-living adjustments by making the consumer price index better reflect seniors’ rising costs for health care and prescription medicine.
To shore up the retirement program’s trust fund, he would lift the cap on taxable income so everyone who makes more than $250,000 a year would pay the same percentage of their income into Social Security as middle-class working families.
Read the report here.