Retirees: 3 Ways the Joe Biden Plan Would Affect You
The 2020 presidential campaign is heating up, and it now looks like almost a certainty that incumbent Donald Trump will go up against former Vice President Joe Biden in November. Although both candidates will look to get support from voters of all ages, older Americans have always been a powerful voting bloc. That makes the plans that each politician has for addressing issues affecting seniors especially important.
Joe Biden's plan has a number of elements tailored toward older Americans. Here, we'll look at several parts of the Biden plan and what it would mean both for today's seniors and for those who expect to rely on Social Security, Medicare, and other government programs in the future.
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1. Significant boosts to Social Security benefits in exchange for higher payroll taxes
The Biden plan highlights the importance of Social Security and the role it plays in supporting tens of millions of Americans. It acknowledges the financial challenges the program faces, and it addresses those challenges while also boosting benefits for a wide range of Social Security recipients.
In general, Biden wants to keep many elements of Social Security the same. His plan would have assets remain invested in the current trust fund structure, with government bonds rather than privatized investment options, and keep benefits available for all rather than using means-testing.
However, there would be some changes. Specifically, Biden's plan would do the following:
- Boost retirement benefits for those who've been retired for 20 years or longer.
- Raise minimum benefit amounts for lifelong workers with low incomes.
- Prevent surviving spouses from seeing huge cuts in their total family benefits after the death of a spouse.
- Do away with the Windfall Elimination Provision and Government Pension Offset, both of which cut benefits of some families that also get public-sector pension benefits.
To pay for these larger benefits, the plan would extend Social Security payroll taxes to those with higher incomes. By doing so, Biden asserts that the financial security of Social Security would be assured.
2. Protection of healthcare benefits
Biden wants to keep the status quo largely intact when it comes to healthcare. The plan doesn't go into great detail on exactly how the former Vice President would achieve these goals, but it proposes the following:
- Defend Medicare coverage for more than 60 million people.
- Protect the Medicaid program, which covers those of limited financial means, including many older Americans.
- Create a tax credit to help family members care for older Americans, taking some of the burden off nursing homes and other facilities.
- End federal government efforts to eliminate the Affordable Care Act and work to make it stronger in cutting costs and simplifying healthcare.
Moreover, Biden would challenge pharmaceutical companies surrounding their drug pricing practices, with the hope of enabling Medicare negotiation directly with drug manufacturers. Various price control measures would aim to make prescription drugs more affordable as well.
3. Make retirement savings more equitable
The Biden plan notes that several current vehicles for retirement savings aren't equally accessible to all. Most retirement savings plans, for instance, provide tax breaks that are proportional to one's tax bracket. That gives the wealthy a greater incentive to save -- even when they're already in the best position to do so.
To remedy that and make retirement saving plans available to more people, Biden would change the tax break for retirement savings contributions to make it a percentage credit rather than a deduction. That would equalize the break for those of all income levels. Biden would also give small businesses incentives to create retirement plans like 401(k)s , with the goal of making retirement savings automatic for the vast majority of American workers. Finally, caregivers who work for relatives without compensation would be able to save for retirement the same way that regular workers do.
In addition, Biden would help those who want to work longer in their careers. Anti-age discrimination measures would get strengthened under the plan, and extending the earned income tax credit to those 65 and older would also give an incentive to those who retire later in life.
Keep your eyes on the campaign trail
2020 has already been a crazy year, and as political campaigns heat up, you can expect a lot more from the candidates on issues affecting older Americans. By listening to what the candidates say, you'll be better prepared when you cast your vote this fall.
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