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Cola update
Old 09-22-2011, 06:09 PM   #1
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Cola update

Got this from an email that I received today from MOAA. 3.6% looks pretty good considering that we have not received one in 2 years.

Quote:

August CPI Released

The Bureau of Labor Statistics announced the August CPI-W of 223.326 a 0.3 percent increase over the July value of 222.686.
The August value of 223.326 is up 3.6% from the 2008 COLA Base of 215.5.

The 2008 COLA base is used to calculate the 2011 COLA since there was no 2009 or 2010 COLA as a result of negative inflation from the third quarter of 2008 to the third quarter of 2009.
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Old 09-22-2011, 06:13 PM   #2
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Originally Posted by mickeyd View Post
Got this from an email that I received today from MOAA. 3/6% looks pretty good considering that we have not received one in 2 years.
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Old 09-23-2011, 01:23 AM   #3
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I was talking with a friend who is now 63. He retired early this year, and started his Social Security in August, as he ( like me ) simply does not trust the government not to increase FRA, or to do means testing, etc..

The topic came up as to when a COLA would apply to his benefits.

So, assuming he receives SS checks from August - December 2011, if there is a COLA for next year, does this mean he will get increased checks starting Jan 2012? At 63, he has no medicare premiums taken away.

I did not know the answer, so am posting it here for someone who knows the answer to enlighten us.
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Old 09-23-2011, 05:24 AM   #4
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Originally Posted by Coolius View Post
I was talking with a friend who is now 63. He retired early this year, and started his Social Security in August, as he ( like me ) simply does not trust the government not to increase FRA, or to do means testing, etc..
Uh, didn't he claim SS before the existing FRA - so it really dosen't matter?

Not to get off topic (sorry) but I just can't understand panic in those folks that are near (or in this case) eligible for SS benefits.

Nor do I think "means testing" will amout to much unless you show a total income (including SS of a very large income) which in the rare case won't affect that many folks. And if it did, how much of your total annual income would SS actually represent?

As far as taxes on SS as an additional thought (going to 100% taxability), it dosen't matter when you take the benefit. It still will be fully taxable (and only on that possible 15% higher tax gap, which would not mean much, anyway).

BTW, I'm also 63 (along with DW) and not in a panic. The government dosen't work that fast and I'm confident that if something does happen, I/DW will have plenty of time to change our plans ... Heck, we could file (on-line) today if need be...

As to your question, yes it would be changed if indeed SS benefits are changed a/o Jan 1st. Anybody receiving benefits anytime during the prior year will have their benefit recalculated and a new benefit statement will be sent to you. They have not been sent out in the last two years since COLA was not applied nor Part B Medicare changed for those receiving Medicare for the last two years, when the old rate was still in place (new rates were applied if you applied for Medicare during the last two years).
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Old 09-23-2011, 09:16 AM   #5
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Originally Posted by rescueme View Post
Uh, didn't he claim SS before the existing FRA - so it really dosen't matter?

Not to get off topic (sorry) but I just can't understand panic in those folks that are near (or in this case) eligible for SS benefits.

Nor do I think "means testing" will amout to much unless you show a total income (including SS of a very large income) which in the rare case won't affect that many folks. And if it did, how much of your total annual income would SS actually represent?

As far as taxes on SS as an additional thought (going to 100% taxability), it dosen't matter when you take the benefit. It still will be fully taxable (and only on that possible 15% higher tax gap, which would not mean much, anyway).

BTW, I'm also 63 (along with DW) and not in a panic. The government dosen't work that fast and I'm confident that if something does happen, I/DW will have plenty of time to change our plans ... Heck, we could file (on-line) today if need be...

As to your question, yes it would be changed if indeed SS benefits are changed a/o Jan 1st. Anybody receiving benefits anytime during the prior year will have their benefit recalculated and a new benefit statement will be sent to you. They have not been sent out in the last two years since COLA was not applied nor Part B Medicare changed for those receiving Medicare for the last two years, when the old rate was still in place (new rates were applied if you applied for Medicare during the last two years).

Rescueme, thanks for the reply.

Yes, this friend is currently receiving SS at 63 - he got his first check only recently.

And you are correct saying that as far as he, or I, or you are concerned, any FRA change is probably not going to affect us folks already above 55.

So, based on what you have said, it would be reasonable for him to expect that his checks come January 2012 would see an increase of about 3.6%, correct? He would be pleased to hear this, don't know if it would make a radical change to his lifestyle.
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Old 09-23-2011, 10:27 AM   #6
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So, based on what you have said, it would be reasonable for him to expect that his checks come January 2012 would see an increase of about 3.6%, correct? He would be pleased to hear this, don't know if it would make a radical change to his lifestyle.
My son has been on SSD (same as SS, but collected at an earlier age, due to disability) for the last 5+ years, so he does (assuming a COLA), your friend should receive a new statement at the end of the year showing any change in benefit. Other folks receiving SS and on Medicare will also show the Part B deduction, which normally comes out of the base SS amount.
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Old 09-23-2011, 04:27 PM   #7
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55 seems to be the magic age in most of the reform proposals.
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Old 09-23-2011, 10:10 PM   #8
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I doubt if the government would do anything that would impact people currentlhy receiving SS and those within about 5 years of receiving it. That would be political suicide. And it is not necessary. SS could be amply funded by slowly increasing the retirement age for our kids and grand kids to about 68 over the next 20 years. They are going to live a lot longer than us so it only makes sense. Remember, 65 was set as the retirement age over a 100 years ago by Otto von Bismark, because most people would never live that long.

Of course, an increase in retirement age for SS would also have to have strong safe guards against discrimination against people over about 58. Such discirimination is rampant these days, though done under the cover of cleverly worded job qualifications. How about, makinging it easier for older worker so phase out of working and into retirment using part-time work that still pays a decent salary?
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Old 09-24-2011, 10:03 AM   #9
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A 3.4% increase in SS isn't good news to me. That simply keeps SS benefits in line with increases in the CPI, so there is no gain or loss on SS.

But, any money I have in fixed dollar assets, like bonds, CDs, or a private pension, shrinks by 3.4%.

I'd be better off with less inflation and a smaller SS increase.
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Old 09-24-2011, 02:08 PM   #10
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Originally Posted by Chuckanut View Post
I doubt if the government would do anything that would impact people currentlhy receiving SS and those within about 5 years of receiving it. That would be political suicide. And it is not necessary. SS could be amply funded by slowly increasing the retirement age for our kids and grand kids to about 68 over the next 20 years. They are going to live a lot longer than us so it only makes sense. Remember, 65 was set as the retirement age over a 100 years ago by Otto von Bismark, because most people would never live that long.

Of course, an increase in retirement age for SS would also have to have strong safe guards against discrimination against people over about 58. Such discirimination is rampant these days, though done under the cover of cleverly worded job qualifications. How about, makinging it easier for older worker so phase out of working and into retirment using part-time work that still pays a decent salary?
It is already 67 - do you think a 20-year transition to 68 would move the needle?
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Old 09-24-2011, 02:19 PM   #11
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Remember, 65 was set as the retirement age over a 100 years ago by Otto von Bismark, because most people would never live that long.
Following that logic, the new FRA should be 100...
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Old 09-24-2011, 02:40 PM   #12
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It is already 67 - do you think a 20-year transition to 68 would move the needle?
Yes.

It already did, with the change in the early 80's to the current ages. The "rules" have to be changed with the increase in lifespan.

Of course (trying not to be political), there should also be an effort for our elected officials to keep their fingers out of the cookie jar ...
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Old 09-24-2011, 03:01 PM   #13
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Originally Posted by Chuckanut View Post
I doubt if the government would do anything that would impact people currentlhy receiving SS and those within about 5 years of receiving it. That would be political suicide. And it is not necessary. SS could be amply funded by slowly increasing the retirement age for our kids and grand kids to about 68 over the next 20 years. They are going to live a lot longer than us so it only makes sense. Remember, 65 was set as the retirement age over a 100 years ago by Otto von Bismark, because most people would never live that long.

Of course, an increase in retirement age for SS would also have to have strong safe guards against discrimination against people over about 58. Such discirimination is rampant these days, though done under the cover of cleverly worded job qualifications. How about, makinging it easier for older worker so phase out of working and into retirment using part-time work that still pays a decent salary?
Don't know who Otto Von Bismark was, but the Social Security Act was passed in 1935. The age 65 was established at that time, and that was 76 years ago. Maybe FDR quoted Bismark somewhere as the reasoning for the age 65. In that case your knowledge of history is greater than mine.

Most reform plans gradually increase the age over time, to age 70.
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Old 09-24-2011, 03:40 PM   #14
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I'd be better off with less inflation and a smaller SS increase.
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Old 09-25-2011, 01:06 AM   #15
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Don't know who Otto Von Bismark was, but the Social Security Act was passed in 1935. The age 65 was established at that time, and that was 76 years ago. Maybe FDR quoted Bismark somewhere as the reasoning for the age 65. In that case your knowledge of history is greater than mine.
Most reform plans gradually increase the age over time, to age 70.
Here's the Bismarck history from the Social Security website:
History Archives - Otto von Bismarck
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