Social Security expecting no cost of living increase for two years
What the government gives, they can quickly take away. Last night senior citizens in the United States learned an important lesson; if there is no inflation, their Social Security payments stay the same as last year.
Hat tip to Morrissey over at Hot Air. From the AP over at Yahoo! News.
Millions of older people face shrinking Social Security checks next year, the first time in a generation that payments would not rise. The trustees who oversee Social Security are projecting there won’t be a cost of living adjustment (COLA) for the next two years. That hasn’t happened since automatic increases were adopted in 1975.
By law, Social Security benefits cannot go down. Nevertheless, monthly payments would drop for millions of people in the Medicare prescription drug program because the premiums, which often are deducted from Social Security payments, are scheduled to go up slightly.
“I will promise you, they count on that COLA,” said Barbara Kennelly, a former Democratic congresswoman from Connecticut who now heads the National Committee to Preserve Social Security and Medicare. “To some people, it might not be a big deal. But to seniors, especially with their health care costs, it is a big deal.”
Please don’t trust the government with your retirement planning.
I understand that if seniors had money invested in the stock market the past few years, they would not have done so well either, but proper planning dictates you move your investments into safer vehicles as you get older. Even though the federal government is now making cars, that does not mean they provide a safer vehicle for your investments.
11 Comments
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I would have left this go by. At least the Social Security benefits will keep coming at the same level as last year. Unless one pulled out of the market completely last summer one would be looking at a severely diminished 401k or a multitude of other investment vehicles. How many years will it take to recover to 2008 levels? Nobody really knows, everybody is guessing and there are Maddoff and other Ponzi schemes to contend with (I got caught in one in spite of assurances by my financial advisor that "due diligence" had been extensively employed). And I also read the fine print put out by financial institutions.
Obama's treatment of the elderly is morally reprehensible. We pay hundreds of billions in bonus and bail outs to Big Failures. We buy car companies, banks, and insurance giants. We print billions of dollars to protect dead end government jobs, and build sidewalks. We spend 7 years fighting a logistically expensive war on the other side of the world. Now the weakest among us must suffer . No SS cost of living increase , and a nefarious plot to cut health care services to the old. Obama would have us believe he is God's partner, but this ethical bankruptcy makes him the Devil's partner in matters of life and death.
If Bush or a Republican controlled Congress level funded a program like this, it would have been called a "Draconian cut" by the liberals, then subsequently, the media. Funny how definitions change…
donh makes some excellent points, particularly with regard to how Obama has been hosing the country with money he doesn't have, for industries he doesn't understand, but money for the elderly is not to be found. Sadly, the same will be said of health care if Obamacare becomes a reality.
In respons to sammy22's caveats, if you look at the performance of the stock market, including the Great Depression (but not the Obama Depression, er, Recession), the overall return on the market was actually averaging around 11% (http://observationsandnotes.blogspot.com/2008/10/100-years-of-stock-market-history.html). On the other hand, Social Security has an average yield around 2% (http://politicalcalculations.blogspot.com/2007/01/approximating-social-securitys-rate-of.html). And while you could lose big in the stock market (mostly from panicky withdrawals), the money is yours. If you die the day after you retire, what happens to your life long Social Security deposits?
"A government big enough to give you everything you want is a government big enough to take from you everything you have" -Gerald Ford
Some people need to learn this.
Google the "Galveston Social Security opt out" and see how reform should be done…
The reference: http://www.examiner.com/x-17004-Dallas-County-Rep…
Today's news report about Social Security is just one more bit of bad news in how badly season citizens are being treated by the President Obama White House, which with its efforts to realized government healthcare, have declared war on those who have paid their dues.
@ Dimsdale- Every financial company "propaganda" states that "past performance is no guarantee of future results". So you are un-disclaiming the disclaimer.
And BTW, Pres. Obama has nothing to do w/ the zero COLA increase: it's a formula established long, long before he took office. And, Pres. Bush was unable to make the changes he wanted to Social Security, thank God.
How lame Sammy. If you have a joint checking account , and one partner goes on a big spending spree, the other partner will find himself unable to pay bills. Obama might not be sitting on the Social Security Board deciding COLA adjustments, but Obama's corrupt hedonistic spending has left Social Security accounts so short of funds there is no other choice but to cancel COLA increases.
Well, how about the corollary: the dismal future performance of Social Security is guaranteed. Maybe that disclaimer should be put on every paycheck…
My reference to Obama is in regards to the monies he does control (with the supine nature of the Democrat controlled Congress): "stimulus" packages and bailouts of Brobdingnagian proportions, while the elderly are increasing left to fend for themselves.
I was simply showing you that the performance of the stock market, over time, including the Great Depression, was upward. Taxing SS income, flatlining it, and doubtlessly lowering it (or greatly increasing taxed) is how your government will "take care" of SS. I would not say this if the SS Trust (ironic, eh?) Fund was not put into the General Fund by Johnson and that Congress.
Was allowing citizens to put a small portion of their SS "contribution" so onerous as to require a "thank God"? Save that for the hopeful future when we can say "Obama and the Democrats didn't pass a 'health insurance' overhaul."
Examine the performance of Galveston, Texas (see reference in above entry).
As I said in the first comment, I would have let this one go by (it was old news anyway). Social Security and health care are incendiary. All we get is finger pointing (that means me too) and all politicians are scared to take them on.
This is such a non-issue. The bottom line is that the Social Security increase was already paid out last year. A massive 5% increase was paid last year. (That's almost as much as the teacher pay increase in my town this year!) The Dec. to Dec. consumer price index increase for 2008 was only 0.1%, but the average monthly increase was 3.8%.
For some bizarre reason, the SS increase is only based on the 3rd quarter CPI increase. That's when energy prices went through the roof. Now that they're back down somewhat, there won't be a SS increase. What's the big deal?