Social Security benefits expected to jump in 2009

Yahoo News ^ | 10/16/2008 | MARTIN CRUTSINGER

[Dawn531]

Social Security benefits for 50 million people are expected to go up next year by the largest amount in more than a quarter-century.

The new cost-of-living increase, to be announced Thursday by the Social Security Administration, is expected to be above 5.5 percent. That would make it the largest increase since a 7.4 percent jump in 1982. The increase for 2008 was 2.3 percent.

[Dawn531]

I know many companies are cutting back on the COLA or eliminating it this year due to the economy (better to have a job and not get a raise, than have no job.) I even heard of one woman whose company has already lowered salaries by 5 percent.

[alloysteel]

One would think that a leap of this magnitude would be counterintuitive, in an economy in a downturn, but Social Security does not respond to normal economic pressures. The rewards for voting in Democrat majorities and very likely a Democrat President have to come quickly, doncha see, upon turning the Republicans out of office.

That aside, the “tax cut” that Barack Hussein Obama, Jr., the charismatic, messianic Magic, um, Mulatto, is nothing but a refund of a portion of the FICA tax collected in part from the employer (the part the employee never sees, but has in fact worked for and and has earned), and sent as an “incentive” (read - WELFARE) to the person who has filed taxes, and has ended up with little if any tax liability. This scheme further adversely affects and depletes the “surplus” of the funds placed in the Treasury by the Social Security and Medicare extortion methods, just meaning these programs will “go broke” and become a net liability on all tax revenues that much sooner.

[Sacajaweau]

SS COLA should be changed. For example.

If you get $800 in SS a month, a 5% COLA is $40. If you get $1200 a month, your increase is $60 a month.

Make it equitable...All should get $50 a month.

[John Valentine]

Make it equitable...All should get $50 a month.

Where do you get the idea that would be equitable?

Lenin University?

[NRG1973]

This is a result of the yera over year growth to the Consumer Price Index being so large. Most of that was caused by high oil prices in the first half of the year.

I suspect that next year’s CPI will be significantly smaller and so will the Social Security increases.

[John Valentine]

Let me be a bit more kind in my reply: Social Security is collected from people as a percentage of their earnings. If you pay more in, you get more back. That’s fair. It’s not a 100% correlation but it is generally fair. If some workers paid more and some paid less, but all go the same retirement benefit, would that be “fair”?

COLA adjustments ought to be done on the same proportional basis if they are to be “fair”.

The alternative is to throw the entire notion of fairness out the window and go with the Leninist maxim “From each according to his ability and to each according to his needs.”

That’s where I came up with the Lenin University reference.

[TomGuy]

The SocSec check may increase around 5.5% (about $60).

Medicare premium is not increasing this time. Good news for those on SS/Medicare.

Many of the mandatory insurances/prescription drug insurances are increasing their premium, some around $28 or so.

Thus, many recipients will see a net increase in their SS check by about $30.

[TomGuy]

This is a result of the yera over year growth to the Consumer Price Index being so large. Most of that was caused by high oil prices in the first half of the year.

High oil prices ripple through the economy. They impact food costs, transportaton and distribution of goods and services, manufacture of products containing oil-based ingredients, and home utilities (heating, lighting, garbage pickup, etc).

Oil prices don't just affect the gas in your car.

[Dawn531]

I haven’t researched this yet, but I have MS, and although I work full time and have health benefits, I know many MSers who, because of their level of disability, collect SS disability and thus Medicare.

I read on a MS board the other day that the “donut hole” on the drug benefit was being increased by $2000. I’m not sure exactly how it works, but Medicare pays up to a certain amount for drugs, then there’s a break in the benefit, then at a certain level it kicks in again. Evidently the level at which it kicks in is being raised about $2,000.

Most people would never reach that level of medication costs, but MSers do because of the disease modifying drugs we use, which are pretty expensive.

So I’m going to look into it a little further and verify what I read.

[TomGuy]

Most people would never reach that level of medication costs

The prescription drug companies charge enormous amounts for generics, even though the beneficiary only pays $0 to $7 at tier 1. Initially, that is good for the beneficiary. However, the ins co applies the full price to the beneficiary's account. So, that $5 generic may cause $40 to be counted against the beneficiary's drug cost accumulation.

In many instances, those on several prescriptions might be better getting their generics at the local drug store on their $4 to $5 general program, rather than against their Medicare prescription drug insurance.

[TomGuy]

SSD just released the info:

Social Security Announces 5.8 Percent Benefit Increase for 2009

Monthly Social Security and Supplemental Security Income benefits for more than 55 million Americans will increase 5.8 percent in 2009, the Social Security Administration announced today.  The 5.8 percent increase is the largest since 1982.

Social Security and Supplemental Security Income benefits increase automatically each year based on the rise in the Bureau of Labor Statistics' Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), from the third quarter of the prior year to the corresponding period of the current year.  This year's increase in the CPI-W was 5.8 percent. 

The 5.8 percent Cost-of-Living Adjustment (COLA) will begin with benefits that over 50 million Social Security beneficiaries receive in January 2009.  Increased payments to more than 7 million Supplemental Security Income beneficiaries will begin on December 31. Some other changes that take effect in January of each year are based on the increase in average wages.  Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $106,800 from $102,000.  Of the estimated 164 million workers who will pay Social Security taxes in 2009, about 11 million will pay higher taxes as a result of the increase in the taxable maximum. 

[george76]

the Social Security trust fund is projected to deplete its reserves in 2041 and will begin paying out more than it collects in benefits in 2017.

[NRG1973]

High oil prices ripple through the economy. They impact food costs, transportaton and distribution of goods and services, manufacture of products containing oil-based ingredients, and home utilities (heating, lighting, garbage pickup, etc).

Oil prices don't just affect the gas in your car.

Yes, you are right!!! Thanks for clarifying the point I was making.

At any rate the CPI is way up this year because of oil prices. But now that oil prices are crashing, next year's Social Security increase won't be as large.

[zek157]

“the Social Security trust fund is projected to deplete its reserves in 2041 and will begin paying out more than it collects in benefits in 2017.”

transalation: The IOU’s in the big cookie jar run out in 2041 and SS begins running an annual deficit in 2017.

[nospin2244]

The average couple, both getting Social Security benefits, will see their monthly check go up by $103 a month to $1,876.

In addition to the cost of living adjustment, the government announced Thursday that the maximum amount of earnings subject to the Social Security tax will increase next year to $106,800, up from $102,000 this year.

[rharrisphd]

I work full time. I am 62. If I take social security now, do I still get penalized for the amount over $12,000 or so?

Thanks

rharrisphd