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Old 10-17-2009, 10:07 PM   #21
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Its changes like this why I hate any investment vehicle that can be dramatically changed due to goverment or statutory bodies.....

Despite the tax advantages of 401K style and pensions etc I have diverted all my investments away from them in the last several years to avoid this very situation.....
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Old 10-17-2009, 11:41 PM   #22
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I don't think that's how it works. My understanding is you do not get a SS cola until after you have turned 62. For people born in 1947 that is 2009. People born in 1947 and turning 62 in 2009 have their first cola in 2010 which is going to be -0-. It is not done on a monthly basis AFAIK.
I agree with you Biker. It looks like all of the 1947 dob folks will forever be a "notch" due to the cola formula and rules and the timing of the cpi data. The month you were born is not a factor.
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Old 10-18-2009, 12:10 AM   #23
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I don't think that's how it works. My understanding is you do not get a SS cola until after you have turned 62. For people born in 1947 that is 2009. People born in 1947 and turning 62 in 2009 have their first cola in 2010 which is going to be -0-. It is not done on a monthly basis AFAIK.
i didnt say you get a COLA on a monthly basis. i said your living costs go up on a monthly basis. please dont confuse COLA with my use of "living cost". COLA is the SS adjustment. living cost is the change in the CPI from 1 date to another.

and i said that the SS COLA for the 1st year is prorated by the number of months you were collecting SS that 1st year. so 1/12 of zero = 11/12 of zero = zero which is why people born early in the year 1947 are at a bigger disadvantage then those born later in the same year as they lost a bigger 1st year COLA. note: 2010 is a special case for COLAs (hence this discussion) as it is the 1st time the COLA has been 0 since the COLA was tied to the CPI.
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Old 10-18-2009, 12:17 AM   #24
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I agree with you Biker. It looks like all of the 1947 dob folks will forever be a "notch" due to the cola formula and rules and the timing of the cpi data. The month you were born is not a factor.
yes all of them will be notched but i still think the 1st year's COLA works the way i said ( i know it does for fed pensions) so some of the notched people have a bigger notch then others, based on the month they were born
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Old 10-18-2009, 09:39 AM   #25
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and i said that the SS COLA for the 1st year is prorated by the number of months you were collecting SS that 1st year. so 1/12 of zero = 11/12 of zero = zero which is why people born early in the year 1947 are at a bigger disadvantage then those born later in the same year as they lost a bigger 1st year COLA. note: 2010 is a special case for COLAs (hence this discussion) as it is the 1st time the COLA has been 0 since the COLA was tied to the CPI.
That's the whole issue here. The 5.8% cola was set at a time when energy costs had fueled inflation for a part of the year (this means your cost of living went up). Then the bottom dropped out of the economy and we had deflation (this means your cost of living went down). So the people born in 1946 and before got the 5.8% bump and the people born in 1947 get nothing. Even this year the first half had deflation and the last half has had inflation.

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yes all of them will be notched but i still think the 1st year's COLA works the way i said ( i know it does for fed pensions) so some of the notched people have a bigger notch then others, based on the month they were born
I don’t know how fed pensions work but my understanding of SS is (and I could be wrong) people born in 1946 turned 62 in 2008 and their first cola year was 2009 and a 5.8% raise. This 5.8% raise was in everyone‘s (those born 1946 and prior ) first check of the year 2009. Yes, those born Jan 1946 had to wait a year to get that cola but also collected 11 more SS checks than someone born in Dec 1946. And the older person is supposed to die sooner so I don’t see any inequity in this process. At least not of the magnitude like the one being hoisted upon the 1947 and most likely 1948 boomers.
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Old 10-18-2009, 10:24 AM   #26
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and i said that the SS COLA for the 1st year is prorated by the number of months you were collecting SS that 1st year. .
I don't think that is the case, but I'm having trouble locating specific info on the SS site. In my searching so far, they make no mention of prorating your first COLA adjustment to the number of months you collected SS your first year. Perhaps someone else knows this specifically and could comment please....... ?
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Old 10-18-2009, 11:06 AM   #27
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Not really. SS earnings are indexed using the average wage index (AWI) until you are age 60. CPI-U increases do not begin until you are 62, so the only people affected in 2010 will be people born in 1947. People born in 1948 will be affected if no cola in 2011. I don't know why they stop the AWI at age 60.
You expect the government to act in a logical manner??
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Old 10-18-2009, 11:19 AM   #28
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You expect the government to act in a logical manner??
TJ
I'll never be found guilty of that.
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Old 10-18-2009, 11:37 AM   #29
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I don't think that is the case, but I'm having trouble locating specific info on the SS site. In my searching so far, they make no mention of prorating your first COLA adjustment to the number of months you collected SS your first year. Perhaps someone else knows this specifically and could comment please....... ?
If your first SS check was say, Nov. or Dec. 2008, you got that amount plus the 5.8% COLA in your January check; it doesn't matter when in 2008 you began collecting. A $1,000 check in Dec. '08 would become a $1,058 check in Jan. '09 regardless of how many months you already collected.
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Old 10-18-2009, 12:06 PM   #30
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If your first SS check was say, Nov. or Dec. 2008, you got that amount plus the 5.8% COLA in your January check; it doesn't matter when in 2008 you began collecting. A $1,000 check in Dec. '08 would become a $1,058 check in Jan. '09 regardless of how many months you already collected.
you know that from personal experience or do you have a reference from the SSA that talks about how the 1st COLA is paid? or something else?
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Old 10-18-2009, 02:23 PM   #31
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If your first SS check was say, Nov. or Dec. 2008, you got that amount plus the 5.8% COLA in your January check; it doesn't matter when in 2008 you began collecting. A $1,000 check in Dec. '08 would become a $1,058 check in Jan. '09 regardless of how many months you already collected.
Thanks Cuppa. That's how I thought it worked and how the SS website says it works.

http://www.socialsecurity.gov/OACT/COLA/colaapplic.html
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Old 10-19-2009, 12:30 AM   #32
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you know that from personal experience or do you have a reference from the SSA that talks about how the 1st COLA is paid? or something else?
Not my numbers but yes, from personal experience. My January 2009 payment was equal to my December 2008 payment plus 5.8%. My first SS payment was November 2008 which, to clarify, was the same amount as the December payment.

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The 5.8 percent increase is the largest since 1982.
Social Security Announces Benefit Increase for 2009

Thanks for your followup and link, Youbet, I was out most of the day.
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Old 10-19-2009, 07:45 PM   #33
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Not my numbers but yes, from personal experience. My January 2009 payment was equal to my December 2008 payment plus 5.8%. My first SS payment was November 2008 which, to clarify, was the same amount as the December payment.
thank you for the info, i guess that is what i get for assuming 1 fed pension program is like another. so the hit to payment (notch) is the same size for everyone born in that year and my point about them losing out is still true.
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Old 10-19-2009, 10:10 PM   #34
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I have read all of this and still not sure what it means to me. I turned 62 this past August. I am still working and from what I am seeing I will be until 66. How is turning 62 and being born in 1947 going to affect me ? I see no way I can retire any time soon anyway. I am not one of the lucky ones who will have their health insurance paid by former employer after I do retire. Maybe I will just retire and take a chance and not have coverage
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Old 10-19-2009, 10:45 PM   #35
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I have the same questions as oldtrig. I don't understand how this affects someone born in 1947 or 1948 unless they start taking early benefits in 2009 or 2010. If they keep working (or choose not to collect at 62), won't it all be OBE as no one gets a COLA in 2010? Under any circumstances, someone who started taking SS in Jan 2009 would get the same increase (assuming there was one) as someone starting SS in Nov 2009 - zero. How do they lose more ground than anyone else who retired before them but also gets nothing in Jan 2010? This just doesn't make sense to me - plus, the person who started taking SS in Jan 2009 will collect 11 more check than the person in Dec 2009.

This is very different than federal retirement - any increase is prorated over the number of months you are retired in a year - Jan 1 you get 12/12 of the increase, July 1 you get 6/12, etc. But, if there is no increase, you get nothing, no matter when you retired that year. Nor does any other federal retiree. How is that a penalty for those retiring in 2009?

Since it's all based (under either system) on the years you work and how much you contribute, how does the lack of a COLA put you at a disadvantage? Your starting point will be the same - you just won't get a boost for the next year, but neither will anyone else.
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Old 10-19-2009, 11:34 PM   #36
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Since it's all based (under either system) on the years you work and how much you contribute, how does the lack of a COLA put you at a disadvantage? Your starting point will be the same - you just won't get a boost for the next year, but neither will anyone else.
I think the point is that the pre-47 people will effectively have had their boost for 2010, 2011, etc., as a result of the large boost in 2009. If you didn't get the 2009 boost then, in a sense, you'll lose out.

Although I must say that all this does have an element of fretting over 'what might have been'. In my opinion this is never a particularly useful or rewarding activity.

Peter
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Old 10-19-2009, 11:39 PM   #37
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I have the same questions as oldtrig. I don't understand how this affects someone born in 1947 or 1948 unless they start taking early benefits in 2009 or 2010. If they keep working (or choose not to collect at 62), won't it all be OBE as no one gets a COLA in 2010? Under any circumstances, someone who started taking SS in Jan 2009 would get the same increase (assuming there was one) as someone starting SS in Nov 2009 - zero. How do they lose more ground than anyone else who retired before them but also gets nothing in Jan 2010? This just doesn't make sense to me - plus, the person who started taking SS in Jan 2009 will collect 11 more check than the person in Dec 2009.

This is very different than federal retirement - any increase is prorated over the number of months you are retired in a year - Jan 1 you get 12/12 of the increase, July 1 you get 6/12, etc. But, if there is no increase, you get nothing, no matter when you retired that year. Nor does any other federal retiree. How is that a penalty for those retiring in 2009?

Since it's all based (under either system) on the years you work and how much you contribute, how does the lack of a COLA put you at a disadvantage? Your starting point will be the same - you just won't get a boost for the next year, but neither will anyone else.
OK let me try this again. first forget getting a different COLA in the 1st yr based on the month you turn 62, i appear to be wrong about that. however, to explain how what happened is disadvantagous to people born in 1947 you need to 1st understand that once you hit the age of 60 your wages are no longer indexed but, instead nothing is changed till you reach the age of 62 and then your benefit is indexed to the CPI, whether you collect it or not. sooo if the year before you turn 62 the CPI shoots up, you dont get that increase. and if the CPI drops in the year you turn 62 then your starting point for the CPI is (using the 2009 numbers) 215.718 but you wont get an increase in your SS pmt till the CPI goes above (using the 2008 numbers) 219.278 which means the 1st 1.65% of CPI increase you experience you will not get credit for (you will not get a COLA for). and that loss will affect EVERY SS check you get after the 1st year, for the rest of your life.
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Old 10-20-2009, 12:09 PM   #38
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OK let me try this again. first forget getting a different COLA in the 1st yr based on the month you turn 62, i appear to be wrong about that. however, to explain how what happened is disadvantagous to people born in 1947 you need to 1st understand that once you hit the age of 60 your wages are no longer indexed but, instead nothing is changed till you reach the age of 62 and then your benefit is indexed to the CPI, whether you collect it or not. sooo if the year before you turn 62 the CPI shoots up, you dont get that increase. and if the CPI drops in the year you turn 62 then your starting point for the CPI is (using the 2009 numbers) 215.718 but you wont get an increase in your SS pmt till the CPI goes above (using the 2008 numbers) 219.278 which means the 1st 1.65% of CPI increase you experience you will not get credit for (you will not get a COLA for). and that loss will affect EVERY SS check you get after the 1st year, for the rest of your life.
and to make matters even worse (since almost all of the drop in CPI occured in the 4th qtr of 2008) at the start of 2009 (end of 2008) the CPI was 210.228 which means people born in 1947 have lost 4.3% (counted from the beginning of 2009) since there will be no COLA for them until CPI gets above the 219.278 point. and again, this 4.3% is lost forever and makes each check the person receives from SS smaller then it would/should be if the COLA calculation had started (used the CPI number) at the time they turned 62.
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Old 10-20-2009, 07:00 PM   #39
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How much difference is this going to make anyway ? If someone depends on SS for their only source of income then they are in trouble anyway and not have much of a life. I never thought I would get it anyway so it will not bother me. I will also delay drawing until later because I still enjoy working. I work as an assistant superintendent at a City golf course and I love playing golf. What else could a person ask for that loves golf. I might as well keep on working because if I were not I would probably be at the course anyway. That is how I feel today. As always with me tomorrow might bring a different view
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Old 10-20-2009, 07:49 PM   #40
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How much difference is this going to make anyway ? ....
For example, a retiree who was collecting $1,000/mo. in Dec. 2008 and then collected $1,058 in Jan. 2009: the difference it makes is an additional $696/year or $20,880 over 30 years. That is the equivalent of about an additional $17,420 in a PF withdrawn at 4%. The SS recipient who started collecting $1,000/mo. in Jan. 2009 or later, does not get that $20,880.
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