Unfortunately, many of these beneficiaries, as well as future beneficiaries, are facing quite the dilemma. If her working husband refuses to take his retirement benefit before age 70 – because he doesn’t want to receive permanently lower benefits – the wife will have to wait until age 70 to collect her spousal benefit. Social Security’s Inflation AdjustmentThe Social Security Administration (SSA) announced recently that there will be no cost-of-living adjustment (COLA) in benefits for 2016.
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Image source: Flickr user Barkbud. We’ve established a well-oiled Social Security advocacy machine with the sole goal of keeping tabs on developments that impact these important sources of economic stability for older seniors. But if a politician messes with grandma’s Social Security check, he or she will never get re-elected. He’d raise the age one month each year, beginning in 2022 when the retirement age becomes 67 under current law. But, in effect, that extra one percent has helped seniors when the cost of living adjustment was increased. A senior, for example, earning $160,000 a year would receive a 35 percent federal subsidy as compared with the current 50 percent subsidy. Boehner started calling it that a year ago. So while you may be seeing a big increase in your medical payments next year, low inflation elsewhere in the economy will depress any increases in your Social Security benefits. However, this may not be entirely true.
Efforts are underway to revise the CPI so that it measures inflation more accurately. CPI-E would take into account differences in spending between retirees and workers.
I don’t know exactly who is responsible for this “war on seniors”, but I think we should vote out whoever is responsible.
The other issue here, as highlighted by the Chicago Tribune, is that millions of retirees will likely face higher Medicare costs because of the lack of a benefits increase in 2016. Because the federal law “holds harmless” about 70 percent of Medicare recipients from premium increases to cover unexpected increases in healthcare costs, the remaining 30 percent of Medicare Part B beneficiaries suffer the consequences by being made to pay higher premiums. Yes, in a cruel contradiction, Medicare Part B premiums are not staying flat.
This affected group of Medicare patients was ensnared by a wrinkle in federal rules because their insurance premiums are not automatically subtracted from a Social Security check. On Medicare, he’d have the wealthier pay more and increase competition by allowing private insurers to compete with it.
Like any good-government proposal, the Bush proposal also seeks to save money by eliminating waste and fraud from the Medicare system. Just because seniors aren’t getting a raise doesn’t mean that rent, property taxes, and prescription drug costs aren’t rising.
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“When hostage takers release their hostages, we are, of course, relieved that the hostages are no longer in harm’s way, but this is nothing to celebrate”, Nancy Altman, president of Social Security Works, said in a statement. By establishing spending levels for the next two years, the deal removes the possibility of a shutdown engineered by conservative legislators who were threatening to refuse to approve a new budget unless they got concessions. This will cost millions of households tens of thousands of dollars. But Democrats have demonized Medicare privatization plans the past two election cycles as shredding the safety net and cast Republican backers as granny killers. Not having this component factored into the CPI-E means switching to the CPI-E may still undercut the income needs of seniors. “You will need to take your first distribution by April 1, 2017”, says Stellhorn.
