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Archive for the 'Social Security' Category

Social Security Cost of Living Adjustment – October 15, 2008

Posted by Service Officer on 17th October 2008

The new cost of living adjustment for Social Security is a 5.8 percent increase. The cost of Medicare part B remains the same.

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SOCIAL SECURITY DEBIT CARDS August 29, 2008

Posted by Service Officer on 29th August 2008

The U.S. government is offering Social Security recipients a new way to receive benefits: debit cards. The cards, which target the 4 million Social Security and Supplemental Security Income recipients without bank accounts, debuted this spring in four states—Texas, Arkansas, Louisiana, and Oklahoma—and are expected to be available nationwide by the end of the summer. Those who choose to sign up for the debit program will receive a MasterCard debit card, which will be reloaded each month with benefit payments and secured with a personal identification number (PIN). The card can be used at ATMs to withdraw cash and at retailers for purchases and to get cash back. Some usage fees are attached: Paper account statements will cost 75 cents; online bill-paying service will be 50 cents per bill. The first ATM withdrawal each month will be free; additional withdrawals will cost 90 cents each, and some ATMs may assess their own usage fees. International ATM withdrawals will cost $3 plus a 3 percent currency conversion fee. Judy Tillman, commissioner of the Financial Management Service at the Treasury Department, says the debit card is a faster and safer way to deliver funds than mailing paper checks. In a small pilot study conducted last year in Illinois, 85% of debit card users said they were satisfied. But consumer advocates warn that individuals must be vigilant in tracking debit card spending and fees. While debit cards carry some protection if lost or stolen, a consumer’s maximum liability depends on how quickly a loss is reported. Debit cards “have a high risk of loss if stolen or abused,” says Ed Mierzwinski, consumer program director at U.S. PIRG, a public interest research group in Washington. “But it’s an improvement on getting a check and going to a check cashier and running out of money before the end of the month [because of deduction of cashier’s fee], or getting mugged on the way out of a check cashier.” [Source: AARP Michelle Diament article Jul 08 ++]

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COLA 2009 UPDATE August 29, 2008

Posted by Service Officer on 29th August 2008

In a story posted earlier this month, 2009 COLA was listed at 2.8%. That was dated information provided by Sen. Daniel Akaka (D-HI), Chairman of the Senate Committee on Veterans’ Affairs and not reflective of the impact on inflation the oil crises has generated this year. The first bad news item is inflation jumped 0.5% for the month of July. The higher cost of living is primarily the result of the ripple effect (on food and other items) because of the high price of oil. The good news is that federal and postal retirees under the old CSRS retirement system, retired military people and folks who get Social Security payments are now due a JAN 08 cost of living adjustment of 6.2%. Last month the 2008 COLA had hit the 5.7% level. The second round of bad news involves retired Americans who don’t get a federal or military retirement benefit. Most of them don’t qualify for any kind of pension from their former employer. Of those that do get a pension, the rise in living costs has no effect on that benefit. The overwhelming majority of those pensions were frozen at the time of retirement.

How much the January federal-military-Social Security COLA be depends on how much living costs rise (or not) this month and again in September. The COLA is based on the change in the Consumer Price Index from the third quarter of the current year (2008) over the CPI level for the third quarter of the previous year. In this case 2007. That means if the CPI holds steady for August and September the COLA payment will be 6.2%. If the CPI goes up either or both months the COLA will increase accordingly. If the CPI should decline the COLA will be adjusted according. Meaning it could, in theory, be less than 6.2%. But there would still be an increase. If you would like to run the numbers for yourself, check out this explanation from the National Active and Retired Federal Employees NARFE website www.narfe.org/departments/leg/guest/articles.cfm?ID=942 . It also gives the projected COLA increase for employees retired under the FECA program. [Source: Mike Causey’s Federal Report 15 Aug 08 ++]

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SOCIAL SECURITY FUND DEPLETION UPDATE August 29, 2008

Posted by Service Officer on 29th August 2008

The Congressional Budget Office, the agency charged with providing Congress with objective analyses of federal programs, released a new report 22 AUG that shows the Social Security program is in good financial shape and will be for decades to come. In fact, the CBO report says, “future Social Security beneficiaries will receive larger benefits in retirement…than current beneficiaries do, even after adjustments have been made for inflation.” The report, which forecasts out 75 years, finds that while the accumulating surpluses in the trust fund will be exhausted in 2049, ongoing revenues will still be sufficient to fund about 81% of promised benefits at the end of the 75-year period (in 2082). The reason for this is that wages and Social Security revenues will continue to grow as the economy grows. The trust fund will cushion the large baby boom retirement, as it was designed to do, but most benefits will continue to be funded by direct transfers from workers to retirees, as they are now. The fact that future retirees will receive higher benefits than current retirees, even if no changes are made to the program, is common knowledge among Social Security experts, but may come as a surprise to the average American, and even to many policy makers. This may be why the CBO, headed by respected economist Peter Orszag, decided to make that point in the first page of the new report.

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SSA COLA 2009 8 June 2008

Posted by Service Officer on 8th June 2008

For years seniors have been getting by on Social Security benefits with a very small Cost-of-Living-Adjustment (COLA). The Senior Citizens League (TSCL) recently released a study that puts real numbers of the loss of buying power they are facing. This study shows that, from 2000 through 2008 alone, Medicare Part B premiums have increased 112%, and that prescription drugs have increased 49%. Concurrently seniors are facing cost increases in basic groceries like milk and eggs. Meanwhile, their Social Security benefits have increased only 24%. The study shows they have lost 51% of their buying power just since 2000. Clearly, the Social Security COLA is not keeping up with inflation, which is what it was intended to do. One primary reason is that the current COLA is based on a market basket of goods typically purchased by younger wage earners, called the Consumer Price Index for Wage Earners (CPI-W). As a result, Social Security beneficiaries received a 2.3% increase in benefits for 2008.

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MEDICARE TRUST FUND 5 June 2008

Posted by Service Officer on 5th June 2008

When a government trust fund no longer has enough cash revenues to pay benefits in full, the Treasury must provide cash from general revenues to pay the interest and redeem the bonds held by the trust fund. But, first, lawmakers must agree on where the money will come from to do that. They can increase taxes, increase borrowing, curt benefits, or cut spending such as COLAs. Historically, seniors have paid their share in higher out-of-pocket costs. The Medicare Hospital Insurance (Part A) Trust Fund last ran low on cash in the late 1990’s. By 1997 Congress passed the most massive cuts to Medicare in the history of the program — $116 billion ($153 billion in today’s dollars) over five years. In addition to cutting payments to hospitals, a provision of the 1997 law moved certain costs that were originally paid under Part A to Part B. While most seniors do not pay a premium for Part A, they do pay a hefty one for Part B. Thus the transfer of costs was one of several factors contributing to the astronomical growth in Medicare Part B premiums, which grew from $43.80 in 1998, to $96.40 in 2008 (120%).

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Social Security Trust Fund 5 June 2008

Posted by Service Officer on 5th June 2008

There actually is a Social Security Trust Fund — of sorts. It lays nestled in the bottom drawer of an unremarkable filing cabinet in a government office building in West Virginia. It’s kept in a pair of loose-leaf notebooks holding plastic page covers, and each page resents a bond worth billions, according to a 2005 story from The Associated Press (AP). Today, the total “assets” in the Social Security Trust Fund are worth more than $2.2 trillion. The paper is “symbolic,” a spokesman for the U.S. Bureau of Public Debt says. According to AP, in 1994 Congress anticipated the current debate about Social Security’s solvency and whether the Trust Funds held anything more than I.O.U.s. Congress passed legislation requiring the Treasury to create a physical document “rather than an accounting entry.” Andy Jacobs, the former Indiana Congressman responsible for the law, said he wanted to rebut the “disingenuous assertions” that there was no trust fund, even though there was, in fact, no vault stuffed with cash to pay benefits. In 2008 it was projected that the Social Security Trust Fund cash surplus excluding interest will be $79 billion reflecting a growing downward trend as baby boomers enter the programs. This does not take into consideration cost associated with Congress’s recent attempts to add illegal immigrants to the program.

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