For the second year in a row people who rely on Social Security will not be receiving a cost of living increase. This is only the second time since the cost of living adjustment (COLA) was adopted that recipients have not received an increase.
The reason Social Security benefits will not be adjusted in 2011 is that inflation has been too low. The whole premise behind the COLA is that benefits are adjusted for inflation so recipients can keep up with rising prices. If there’s no inflation, there’s no need for an increase. The most recent inflation numbers published by the Labor Department shows that prices are lower than they were in 2009, the last time Social Security benefits were increased.
Continue Reading No COLA for Social Security Benefits in 2011
Social Security retirement benefits can be collected as early as age 62 or as late as age 70. Full retirement age depends on your birthday, but for boomers now starting to retire, the full retirement age is 66. If you receive benefits before you reach full retirement age, your benefit will be reduced by up to 25%. Alternatively, if you postpone collecting benefits after you reach full retirement age, your benefit will increase by 8% each year until you reach age 70. After age 70 you can no longer earn credits so there is no benefit to delaying benefits after age 70.
According to the Social Security Administration, approximately 73% of current beneficiaries submit their Social Security application before reaching retirement age and are therefore receiving reduced benefits; however this may not be the best strategy. Your health, life expectancy, marital status and other resources all play a role in when you should start collecting benefits. Because Social Security plays such an important role in your retirement income (at least for most people), it is recommended that you consult a financial professional who is knowledgeable in Social Security to help you determine the best time to start receiving retirement benefits.
Social security programs first appeared in Europe in response to families moving from farming to working for others as the world became industrialized. Germany established the first social security program way back in 1889.
In the United States, the Great Depression triggered an economic crisis that caused millions of seniors to become impoverished. President Franklin D. Roosevelt passed the Social Security Act in 1935 in an attempt to provide economic security for the elderly.
Under the original Social Security retirement program, only workers received benefits , and only retirement benefits (there were no survivor or disbility benefits under the original Social Security program). In 1939, the act was amended to provide benefits to spouses and children for both retired and deceased workers.
Continue Reading What is Social Security? A Brief History…
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.
For years, we’ve heard that Social Security is “going broke” or that it “won’t be enough”.
While Social Security is definitely facing some challenges, baby boomers are starting to realize that Social Security will be an important source of retirement income after all.
In this blog, we’re going to teach you about the history of Social Security, how you become eligible for benefits, how your Social Security benefits are calculated, what happens when you apply for early benefits, how your benefits are taxed, and much more.
Basically, we’re going to get you thinking about Social Security before you retire, so you can make informed decisions and get the most out of your Social Security retirement benefits.