WASHINGTON— Social Security checks are going up $63 a month for the typical retiree — the largest increase in more than a quarter century but likely to seem puny to the millions who have been watching in horror as Wall Street lays waste to their retirement nest eggs.
 Now, retiree will be able to have more money in their checks because of the yearly adjustment in Social Security finances. |
The yearly adjustment in Social Security checks is linked to government inflation figures, but advocacy groups for seniors say it’s far short of what the typical retiree needs to keep up with rising living costs.
The Senior Citizens League said it did a study that indicated people 65 and over have lost 51 percent of their buying power since 2000, with the price of home heating oil and gasoline more than doubling since the beginning of the decade and such food staples as eggs and potatoes showing big increases as well. “Although the word crisis gets thrown around a lot in our national dialogue, there’s no other word to describe it. Millions of our nation’s seniors are facing an economic crisis,” says Daniel O’Connell, the league’s chairman.
Adds Mark Zandi, chief economist at Moody’s Economy.com: “Most households will take any cash they can get in these very difficult times when seniors have been panicked watching the fall in stock prices and what is happening to banks where many of them have their CDs.”
The 5.8 percent increase announced Thursday by the Social Security Administration will go to the 50 million Americans receiving benefits. It is the biggest jump since the 7.4 percent of 1982.
The $63 typical monthly increase compares to the $24 advance that retirees saw in this year’s benefit checks, an increase of just 2.3 percent and the smallest in four years.
The typical retiree’s monthly check will go from $1,090 to $1,153. Retirees will also be getting help from falling gasoline prices, which had surged earlier in the year but now are falling sharply.
In another break for most retirees, the cost of living increase will not be eaten up by higher monthly premiums for the part of Medicare that pays for physician services. Because of gains in the Medicare Part B trust fund, that premium will hold steady at $96.40 a month, although higher-income people including couples making more than $170,000 annually will see their premiums increase.
In some unwelcome news for people who have not yet retired, the government also announced Thursday that the maximum amount of earnings subject to the Social Security tax will increase next year to $106,800, from $102,000 this year.
Of the 164 million workers who will pay Social Security taxes in 2009, about 11 million will pay higher taxes as a result of this increase.
For an average couple, with both getting Social Security benefits, monthly checks will go up by $103 a month, to $1,876.
The average monthly Supplemental Security Income payment, which goes to the needy, will increase for an individual from $637 a month to $674.
The average monthly check for a disabled worker will go from $1,006 to $1,064.
Sens. Barack Obama and John McCain have sparred over Social Security during the presidential campaign, although neither has provided much insight into how he would fix the government’s largest entitlement program, which is facing severe strains with the upcoming retirement of 78 million baby boomers.
If no changes are made, the Social Security trust fund is projected to deplete its reserves in 2041 and will begin paying out more than it collects in benefits even sooner, starting in 2017.
As for people’s other arrangements, the Congressional Budget Office has estimated that Americans’ retirement plans have lost as much as $2 trillion over the past 15 months — more than 20 percent of their value — because of all the market turbulence.
The Social Security increase is based on changes in the Labor Department’s Consumer Price Index in the July-September quarter compared with the same period a year earlier.
That figure also triggers increases for retired federal workers. Federal retirees covered by the Civil Service Retirement System will see their benefits increase by 5.8 percent, while employees hired in 1984 or later will get a 4.8 percent increase.
Comments
carol wrote on Oct 27, 2008 1:35 PM:
wanta try this for awhile.
No Way could or would they live under such conditions "
william c simpson wrote on Oct 26, 2008 4:18 PM:
Beverly Newman wrote on Oct 22, 2008 8:44 PM:
Leonore wrote on Oct 22, 2008 8:21 PM:
Ms Cora wrote on Oct 22, 2008 7:43 PM:
that Medicare will stay the same. That is a big help, since it useuley goes up when there is a raise in SS. I think this will be a great relief for a lot of Seniors living on a limeted income. Thanks for letting us voice our opinion "
T wrote on Oct 22, 2008 6:35 PM:
YA but then the goverment just raises the cost of some other thing you need to live, so they take the extra 63 dollar right back out of your pocket.. "
Kettle wrote on Oct 18, 2008 6:18 PM: