Wikinvest Wire

A $63 raise for Social Security recipients

Thursday, October 16, 2008

According to this report in the LA Times, the U.S. government is about to increase social security payments by a whopping 5.8 percent come the first of the year.

While this may not seem like a lot, for those on fixed incomes, every little bit helps and, now that energy prices are falling, things might be appreciably better for senior citizens in the months ahead relative to earlier this year.

Of course things were just awful earlier in the year and, unless food prices and medial expenses start going down along with energy prices, 2009 may not be all that much better than 2008 for retirees.

The increase is the largest since a 7.4 percent jump in 1982 and is more than double the 2.3 percent rise that retirees got in their monthly checks starting in January of this year.

The typical retiree's monthly check will go from $1,090 currently to $1,153.

But the fatter Social Security check may still seem puny to millions of retirees battered this year by huge increases in energy and food costs who have also watched helplessly as their retirement savings have been assaulted by the biggest upheavals on Wall Street in seven decades.
For those senior citizens who don't care about the price of their home because they don't have to borrow against it (a much smaller number than a year or two ago) and for those who heeded conventional wisdom of a bygone era in eschewing equity investments in their golden years, next year could be markedly better than this year.

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Anonymous said...

I spoke to my parents recently about rising costs of everything. Well surprise, surprise, they are making significantly more in absolute dollar amounts in retirement than they ever made while both of them were working. So while they may not be getting ahead, they're able to live comfortably in retirement. Their sources of income: fixed payout pension plans, IRA's, and of course social security. Oh and their medical, included with the pension plan, is far better than mine. Now why do I feel like my retirement is going to suck ass relative to theirs? Well for starters let's just assume social security will not exist as we know it today. It may very well mutate into a worthless pos. I do NOT have a defined pension plan. My 401k benefits will be taxed up the yinyang because we'll finally realize we've got to reduce our national debt. I will have to pay for my own medical insurance. This is the really scary one - Inflation in its many forms will ultimately reduce my standard of living. Doesn't the future look bright?

no_retirement_for_you said...

The era of middle class retirement is over! The ability to retire will once again be limited to the idle rich and whoever can win the lawsuit lottery. The world has changed and US citizens will have to adjust their expectations.

Nostradamus, apparently said...

My experience with seniors is that gasoline is not nearly as much a concern as medical and food costs. The lower cost of oil at the moment will help with heating, though.

The record increase in SS is an attempt to buy off the seniors since they tended not to benefit from the last stimulus tax rebate and tend not to be Wall Street bankers receiving a bail out.

Food and medical expenses continue to rise more rapidly than SS increases so seniors will continue to go backwards.

While 5% is better than 3%, we all would have been far better off if the feds had decided not to print so much money.

Once you start printing money, giving it away is easy. Again, to beat the drum, think Weimar Republic. This story is just another example of how cheap money is right now.

If you see deflation on the horizon, I think you need glasses. For the things that matter (food, shelter, fuel), I predict unprecedented inflation.

Anonymous said...

Ha, Ha, Ha, that $63 will be taxed like everything else. My SS went down hundreds of dollars when my husband died. We get to pay for all these people that never put a dime into SS but are reaping the benefits. And how about members of Congress that voted themselves $250,000/yr. TAX FREE if they ever retire-HA! Once food prices go up, they NEVER come down-ever. And what about paying $100 for ONE pill so the greedy pharmaceutical companies can make money when it costs them pennies to make a pill but we have to pay for their advertising or "research"-ha. It's true you have to be TOUGH to be old.You eat your money and everybody wants your money before you die!! It's also true the middle class is disappearing. We have the rich and the poor.Not every senior is making more than they did working. With the stock market continuing to go down, retirements go down. My husband's income dropped in half after he retired and it was cut in half again when he died. And how about level pay for natural gas?? Mine jumped from $87/month to $200/month with no explanation. I live in a 900 sq. ft. house. My sister lives in a 2000 sq. ft. house and pays $47/month level pay.Go figure. We had to pay for our parents to live comfortably in their older yrs. They were the last generation to do so. Well, the feds are doing 1 thing. If the jobs are there, the boomers won't be able to retire and the taxes on their incomes will be there to pay off some of the national debt. Wake up America-you're being jacked around.

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