Money in the Middle

Sandwich Generation Talking About Money Up, Down and Across Generations

Posts Tagged ‘social security

Social Security: No COLA Again?

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Within the next few weeks the Social Security Administration will announce the fate of the cost-of-living-allowance for 2010.  The news doesn’t look good — for the second year in a row.

The decision for 2011 is based on the change in inflation between the third quarter of 2008 and the third quarter of 2010

 “[There has been] an increase [in prices] relative to 2009, but it’s still below the 2008 level, so no COLA again,” said Donald Marron, a former director of the Congressional Budget Office told USA Today .

The decision will also impact many pensions that are tied to the Social security COLA decision.

While we surely haven’t seen the price increases to support a COLA increase, it sure doesn’t feel good.  Especially for those who are already retired and counted on those modest bumps for their living expenses.

For those still working, there’s some good news.  The same law also keeps the same cap on wages subject to Social Security for 2011.

Expect to hear more from Social Security by mid-October.

Written by Laura Rossman

October 5, 2010 at 11:47 pm

Baby boomer tips to their children on retirement

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 There was generally good news about the state of Medicare and Social Security last week when the trustees released their 2010 Annual Report.  Good news for  baby boomers.  Not so good for the generations following us.

 Medicare is looking much healthier, thanks to the changes in the health care reform bill that reduces costs for prescription drugs and physician services..  The Hospital Insurance trust fund is expected to remain solvent an additional 12 years – until 2029.  While Medicare finances have improved, further reforms will be needed. 

Social security isn’t sitting quite so pretty, but there’s no reason for alarm.  The recession’s combination of fewer workers and more early retirees means that Social Security expenditures are expected to exceed tax receipts in 2010 for the first time since 1983.

 “The fact that the costs for the program will likely exceed tax revenue this year is not a cause for panic but it does send a strong message that it’s time for us to make the tough choices that we know we need to make,”  said Michael J. Astrue, Commissioner of Social Security. 

The report said that the deficit is expected to shrink substantially for 2011 and to return to small surpluses for years 2012-2014 due to the improving economy.   But as the baby boomers begin retiring in larger numbers in 2014 the number of beneficiaries grows substantially more rapidly than the number of covered workers.

So we’re beginning to hear a lot more –from both political parties – about the need to tackle the issue of retirement age. It’s unlikely that it will impact the benefits of baby boomers – most of whom will reach full retirement at age 66.

But for those younger, the role of Social Security is likely to change as is the nature of retirement planning and work.

It’s a very difficult environment for people who are good planners when it comes to their finances. 

The best advice baby boomers can give their children: count on long and varied careers.  Keep funding that 401(k) plan as much as you can.

 Learn from our mistakes : plan better; rely on your own savings; live within your means (that one’s from your grandparents) and find work you enjoy

You’re going to be counting on your own resources more than your parents or grandparents!

Written by Laura Rossman

August 9, 2010 at 7:33 pm

No COLA for Social Security Recipients

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No cost-of-living adjustment for Social Security recipients in 2010.  That’s the official word today from the Social Security Administration.  The focus now turns to Congress to see whether they will  provide a $250 payment to each Social security recipient in 2010.

The supporters of the $250 payment say that seniors experience more health care costs and those costs are increasing much faster than the consumer goods formula COLA is based on.  AARP is contacting its members to tell members of Congress to support the payment.  President Obama endorsed it today.

I’m sure it will be welcome relief to those who are experiencing increases in  Part D drug plan prices increasing or Medicare Part C plan premiums. But I wonder when we will stop making exceptions to rules because we don’t like the outcome.

Written by Laura Rossman

October 15, 2009 at 6:56 pm

Favorite Retirement Planning Resources

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Consumer Reports just listed their five favorite retirement planning sites.  I’d say they are more sites to help support building a retirement plan.  They can also be very helpful if you’re in the midst of a crash course trying to understand Social Security and Medicare to help an older adult.  Here are the five sites CR recommends:

www.ssa.gov The Social Security site gives you information on social Security payments, plus estimator so you can see how much you’ll be eligible for.  You can even sign up online for benefits as you approach eligibility age — 62 — but really think about whether you can wait until 66 or older.

www.IRS.gov — Great information on IRAs, estate planning rules –just takes some time to wade through the information. You can also find out the rules around declaring an older adult as a dependent if you are providing support and care.

www.PBGC.org— If you are lucky enough to have a defined benefit plan, but it’s in financial trouble, it may end up with the Pension Benefit Guaranty Corp.  Information and rules here.

www.medicarerights.org and www.medicare.gov – Lots of great information understanding your rights under Medicare, but also how it works and what it pays for.  also great information for caregivers and ratings on nursing homes.

www.elderhostel.org — not retirement planning, but if you’ve got the time and money to travel, this site provides some great trips – including some for taking along the younger generation.

 I would add:

 www.aarp.org/money/personal/reverse_mortgages/ – Reverse mortgage information.  there’s more interest in these mortgages as cash strapped retirees look to their home to help pay bills.  It’s important to understand the pros and cons before heading down this path to see if it’s the right choice.

www.aaltci.org/— Long-term care insurance information

www.caring.com — Good source of information and community for caregivers

www.wiserwomen.org — Women’s Institute for a Secure Retirement — good basic information and special considerations for women — young and older.

 

 

 

Written by Laura Rossman

April 8, 2009 at 1:58 pm