Posted on October 6, 2011 by Erin
Here’s some good news for once! It was announced that after two full years of no COLA (Cost of Living Adjustment) raise, Social Security recipients may be due for one in 2012. Though it’s not etched in stone just yet, it’s expected that the announcement for as much as a 3.5% raise may be announced at the end of this month.
The raise in COLA is obviously needed and it’s been a very rough two years for people who rely on Social Security for their retirement income. The price of gas, food, electricity and clothing have all risen while income has remained exactly the same. But things must always balance, and if COLA is increased expect an increase in Medicare premiums.
Are you anxiously awaiting the announcement? Did the past two years with no increase really impact your retirement income?
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Posted on September 22, 2011 by Erin
Do you think Social Security will be around for your children or grandchildren? Senator Tom Carper of Delaware was quoted as saying, “My sons are 21 and 22; neither of them thinks Social Security is around for them. I want to make sure that it is.” But how? Obviously if we knew how to answer this question, it wouldn’t be such a debate! But the U.S. government has come up with one proposal that is gaining steam – increasing the retirement age.
The current retirement age of 66 was originally set because of the way Americans worked in the early 20th century. Many of the jobs were factory and other blue collar jobs that were rough on the body. As time continued and these jobs moved out of the country, Americans made the switch to less physically demanding and more mentally challenging jobs. Because of the switch, more Americans began living longer lives and had the ability to continue with their jobs for a more years than the physically demanding jobs. The most popular plan among lawmakers is increasing the retirement age slowly over time. By year 2050 the proposed retirement age would be 68 and would increase to 69 by year 2075. If this becomes reality, the change would affect those born after 1982. Do you think that an increase to the retirement age is the answer to helping our economy and Social Security?
You can read more about this topic, here.
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Posted on August 24, 2011 by Erin
Imagine walking to your local bank to make a transaction and you find all of your accounts have been closed because you’ve been declared dead. It sounds impossible, but it happens more than you think. Each year, Social Security declares 14,000 wrongly dead. That averages out to 38 mistakes a day! While it may seem amusing at first, it’s no laughing matter. Mistaken death entries lead to Social Security benefit cutoffs and can result in the living person’s Social Security number being released in files available to the public.
For some people that have been declared dead by the Social Security Administration, the mistake has cost them financially too. One woman was accidentally entered into a funeral home’s death notice and therefore declared dead. She then racked up $400 of bounced check fees and never received the more than $1,000 in disability payments she was owed. Even when she was declared alive again, the administration refused to reimburse her. If you are ever declared dead, the first step is to find out who made the mistake then get a copy of your death certificate and fill out a form to amend it. You will probably also have to have the individual who reported your death, sign the certificate.
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Posted on August 12, 2011 by Erin
Spend more money to save more money for retirement? According to Rob Warner, author of the book, “Get a Life: You Don’t Need $1Million to Retire Well,” that’s exactly what to do. It may seem counterintuitive, but he has a point.
My favorite example that he gives his readers is to take more vacations. According to Warner, people want to retire at an early age because they have worked themselves to the bones for many years – they rarely took vacations or when they did, they scrimped and saved and never felt like they truly took a break. Retirement to these people is a permanent vacation where they can finally go to all those places they were never able to. Who wouldn’t want to race towards that! But think about it – if you do take quality vacations, you’ll feel more rested. If you feel rested, you may be able to work another year or two. If you work another year, you are able to delay Social Security which means an extra 8% more in benefits for life. And by working another year, you’re adding to your savings instead of beginning to deplete it. And so on and so on. You can read more examples of creative ways to save for retirement, here.
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Posted on July 19, 2011 by Erin
When most people think of the tools used for planning their retirement, they think about 401k’s, pensions and other funds that are typically associated with employed wage earners. But what happens if you or your spouse forgo a paycheck and stay at home? What kind of retirement planning is available to you?
One way to collect money is through Social Security’s spousal benefits. A spouse who has never worked under Social Security can receive a benefit equal to one-half of the working spouse’s full retirement. But just like regular Social Security benefits, it’s a good idea to diversify and not rely fully on this as your sole retirement income. Another available option is funding what is known as a Spousal IRA. If one spouse is working and the couple files a joint federal tax return, the non working spouse can contribute up to $5,000 into their own IRA or ROTH IRA.
Need more tips on how to fund retirement for a non-working spouse? Get ideas here.
Would spousal benefits be a good idea for you? Read more about them, here.
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Posted on June 21, 2011 by Erin
Last week, AARP announced that it is in favor of “modest reductions” in Social Security benefits, which confused many. The powerhouse Senior Lobby group has always been one of the biggest opponents to any cuts to the program, which is why their new stance caught many by surprise. AARP still stands firmly by their position insisting that “Contrary to the misleading characterization in a recent media story, AARP has not changed it’s position on Social Security.”
So where does AARP stand? According to their CEO, A Barry Rand, exactly where they always have. He stated that, “We have maintained for years – to our members, the media and elected officials – that long term solvency is key to protecting and strengthening Social Security for all generations, and we have urged elected officials in Washington to address the program’s long-term challenges in a way that’s fair for all generations.” It seem the only change is that they are now opening up to the possibility of negotiations and getting a much needed dialogue started on the subject.
Do you agree with AARP or do you think they are wavering from their past stance?
Read the full New York Time’s article, here.
Read AARP’s official response to the story, here.
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Posted on May 19, 2011 by Erin
It may sound crazy, but some are suggesting that it’s a good thing for seniors if gas prices keep rising. Why? It has to do with the annual Cost-of-Living Adjustment (COLA) for Social Security benefits. Third-quarter prices are used to determine the next year’s adjustment, so if oil prices are high, then COLA will be adjusted accordingly. For example, the high prices of oil during the summer caused 2009′s COLA to raise 5.8%.
Of course, there are always two sides to a story. Basic Medicare Premiums are based on COLA. If COLA increases, these Medicare premiums could begin to rise. Are you excited for higher gas prices?
Read the Why Seniors Should Embrace Higher Oil Prices here.
Consider the benefits and drawback of Medicare supplemental insurance programs
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Posted on May 18, 2011 by Erin
34 percent of retirees ages 65 and older, get 90 percent of their retirement income from Social Security. While the old adage, “don’t put all your eggs in one basket” definitely rings true for retirement plans, the reality is that many people have to rely on Social Security. Here are a few ways to make your retirement still happen if Social Security is your primary source of retirement income.
- Boost Your Benefits: Did you know that if your hold off on taking Social Security until you are at your full retirement age (rather than immediately at 62), you can increase your payment for each year you delay your claim?
- Do You Own a Home That Has Equity Invested?: Use it! Reverse Mortgages are allowing homeowners that are 62 or older and have little or no mortgage to tap into this money. Many use the loan as an emergency line of credit to fall back on if needed.
- Continue Working: Maybe not the suggestion retirees want to hear when they are ready to retire! But holding a part time job doing something that you truly love can help your spirit and your wallet.
What do you think? Is it possible to retire on Social Security alone? Is it wise? What’s your plan to have a great retirement?
Read the full article, “How to Retire on Social Security Alone.”
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Posted on May 16, 2011 by Erin
Last week, 42 freshmen Republican members of Congress wrote a letter to President Obama urging him to stop saying that the Republican budget plan would put an end to Medicare.
Why do some believe that Republicans ARE ruining Medicare? Because of their plan to reject any tax increases that come to the table. Baby Boomers are now reaching retirement and beginning to rely on programs such as Social Security, Medicare and Medicaid. In order to keep these programs alive, a significant increase in spending will be necessary. Some ask how we can do this if we don’t raise taxes. Others believe we just need to cut more spending. What’s your opinion?
Read the New York Times’ full article, “Seniors, Guns and Money,” here.
Will changes in Medicare change you retirement plan?
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Posted on March 28, 2011 by Jason
Up until now, both parties have been reluctant to target entitlement programs such as Social Security and Medicare for cuts. Recently, however, many new Republicans have begun to talk about reducing benefits for future or even current retirees.
The article explains just who is making these claims, and what they think should be done with these entitlement programs.
