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.
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.