Retirees Won’t Receive an Increase In Social Security Benefits Next Year
July 1, 2009
Earlier this year, retirees on Social Security saw one of the largest COLA increases they’ve seen in years – since the 1980s to be exact. Unfortunately, the Social Security COLA is expected to be zero for the next few years.
If you’ve been receiving Social Security for a while, you know that your benefits are adjusted each year for inflation. This is known as a cost of living adjustment, or COLA.
The COLA is announced in October of each year and is based on the CPI-W (the Consumer Price Index for Urban Wage Earners and Clerical Workers) from the 3rd quarter of the previous year to the 3rd quarter of the current year. Changes announced in October go into effect in January of the next year.
Common Social Security Retirement Questions
June 16, 2009
As Baby Boomers are getting closer and closer to retirement, they have many questions about Social Security, such as…
Will Social Security be there for me when it’s my time to retire?
We’ve heard for years that Social Security is going broke. Millions of Americans rely on Social Security to fund all or part of their retirement, so this is a huge concern in our country. So, just how true are the rumors that Social Security is going broke?
According to the 2009 Social Security Trustees Report, Social Security benefits paid out will exceed revenues starting in 2016, and the trust fund could be exhausted by the year 2037. Once the trust fund is exhausted, benefits will still be paid out, but the taxes collected from workers will only be enough to cover 76% of the benefits promised.
While these numbers are definitely alarming, the chances that Social Security is allowed to fail are minimal. Most likely we will see reforms such as raising the full retirement age, raising the income limit that Social Security taxes are paid on, and reduced benefits for future recipients (it’s less likely that people already receiving benefits will see their benefits reduced).