Guvmint COLA up 5.8%

[JPatrick]

Social Security benefits going up by 5.8 percent

By MARTIN CRUTSINGER – 26 minutes ago
WASHINGTON (AP) — Social Security benefits for 50 million people will be go up 5.8 percent next year, the largest increase in more than a quarter century.
The increase, which will start in January, was announced Thursday by the Social Security Administration. It will mean an additional $63 per month for the average retiree.
The increase is the largest since a 7.4 percent jump in 1982 and is more than double the 2.3 percent rise that retirees got in their monthly checks starting in January of this year.
The typical retiree's monthly check will go from $1,090 currently to $1,153.

 

[freebird5825]

same for federal CSRS retirees, and i do believe for military retirees also (can someone please verify?)

see CSRS retirees to receive 5.8 percent pension boost in 2009 (10/16/08 ) -- www.GovernmentExecutive.com

 

[al_bundy]

next year with deflation and all we are going to take money away

 

[OAG]

Applies to Military Retired Pay and will also be applied to VA Disability Benefits (although the VA usually takes it's time about acknowledging the increase).

Al - The SS and Military Retired pay (including VA) does NOT go backwards. 0 increase is the lowest it can go.

 

[ziggy29]

Not work and get 5.8% or work and (in my case) get 2%. Hmmm....

 

[ziggy29]

next year with deflation and all we are going to take money away

No -- deflation means the COLA is zero. And the return on I-bonds and TIPS can never be negative, either.

 

[Helena]

Deflation

The last two months were negative... otherwise it would have been 6.2 or higher.

National Active and Retired Federal Employees Association

 

[Bikerdude]

Social Security benefits going up by 5.8 percent

By MARTIN CRUTSINGER – 26 minutes ago
WASHINGTON (AP) — Social Security benefits for 50 million people will be go up 5.8 percent next year, the largest increase in more than a quarter century.
The increase, which will start in January, was announced Thursday by the Social Security Administration. It will mean an additional $63 per month for the average retiree.
The increase is the largest since a 7.4 percent jump in 1982 and is more than double the 2.3 percent rise that retirees got in their monthly checks starting in January of this year.
The typical retiree's monthly check will go from $1,090 currently to $1,153.

Anybody know how this rate relates to the TIP/I-bond inflation rate due 12/1/08?

 

[deepc]

Inflation update: US Savings Bonds

Next inflation component 4.92 pct. Loving it.

 

[freebird5825]

Inflation update: US Savings Bonds

Next inflation component 4.92 pct. Loving it.

um...gotta ask this one...

i own a small I bond ladder, all purchased between 2003-05.

does the inflation component referenced above (2008 value) only apply to I bonds purchased NOW or any purchased anytime in the past?

 

[ziggy29]

um...gotta ask this one...

i own a small I bond ladder, all purchased between 2003-05.

does the inflation component referenced above (2008 value) only apply to I bonds purchased NOW or any purchased anytime in the past?

ALL I-bonds get the same inflation adjustment. Only the fixed rate is different.

Mine are from 2000, with a 3.4% fixed rate. Dang, I wish I could have afforded more of them at the time.

 

[freebird5825]

Not work and get 5.8% or work and (in my case) get 2%. Hmmm....

plus not pay the usual payroll deductions and then maybe have to pay even more taxes every April.
plus never set the alarm clock, nor fight commuter traffic, nor deal with co-w*rkers with BO, nor...
life eez good, yes?

 

[USK Coastie]

If they calculated the inflation as they did before 1982, todays inflation rate would be 12 -15 %

 

[freebird5825]

ALL I-bonds get the same inflation adjustment. Only the fixed rate is different.

Mine are from 2000, with a 3.4% fixed rate. Dang, I wish I could have afforded more of them at the time.

thanks!
i bought 1 every month, $100 each, for 33 months. a very small stake but loving it now. i need to look up my fixed rate once i figure out how to use my new treasury direct account number. i'm FIREd so i haven't gotten a round TUIT yet.

 

[ziggy29]

thanks!
i bought 1 every month, $100 each, for 33 months. a very small stake but loving it now. i need to look up my fixed rate once i figure out how to use my new treasury direct account number. i'm FIREd so i haven't gotten a round TUIT yet.

Looking at mine from 2000, I can't do much better than a safe, tax-deferred 8.32% in the months to come. In hindsight I should have begged, borrowed or stolen to buy more.

 

[freebird5825]

Looking at mine from 2000, I can't do much better than a safe, tax-deferred 8.32% in the months to come. In hindsight I should have begged, borrowed or stolen to buy more.

ok, made me look! i also found my round TUIT. LOL
i was mistaken - i bought between May 04 to Jan 07.
current interest rates range from (specific months in years listed are omitted on purpose)
5.86% (04-05)
6.07% (05)
5.86% (05-06)
6.27% (06-07)

i would NEVER in a zillion years think i would be here crowing about US govt I bonds beating out my mutual funds. i have noticed the dividend yield YTD has moved up a bit on my stock mutual funds. small consolation, big whoo.
and in spite of the beating munis are taking, they are paying some rather nice TE dividends.
i sound like a dyed in the wool income investor.

 

[JPatrick]

Inflation update: US Savings Bonds

Next inflation component 4.92 pct. Loving it.

Wonder if they will budge off that 0.00% fixed rate in November..If they would do 1% or so the new I-Bonds might look good unless you think we have entered a delation zone.

 

[deepc]

Can't see them moving off that rate. Figure they need to keep capital moving to banks/etc and not the govt, inflation is a real possibility, and they've already implemented ridiculously low buy limits anyway.

Good discussion of this point on that Savings Bond Advisor site.

 

[Brat]

Don't get too excited about the COLA, I hear health insurance is increasing 18%.

 

[Bikerdude]

Don't get too excited about the COLA, I hear health insurance is increasing 18%.

The Medicare premium is not increasing for 2009.

 

[OAG]

And TRICARE for Life cost is also not changing for 2009! Hope my local Doctor does not ask for $350 annual to be a patient.

 

[samclem]

Wonder if they will budge off that 0.00% fixed rate in November..If they would do 1% or so the new I-Bonds might look good unless you think we have entered a delation zone.

It would be expensive for the government to increase the fixed rate. I-Bonds can be sold without a fee if they've been held for 5 years, and after only one year if you are willing to give up 3 months of interest. So, there's a huge chunk of pent-up I-Bond money that investors will quickly re-invest at the higher rate if the fixed rate goes up. I think this is a big problem with the I-bond construct, effectively a ratcheting mechanism that results in the fixed component only going down, because going up costs the government a lot of $$. In my opinion, that's how we got to the present zero% fixed component, and we'll stay near this point for a long time.

 

[ziggy29]

The Medicare premium is not increasing for 2009.

At my w*rk, the 2009 HDHP/HSA option is going *down* 5%, and they are increasing the HSA employer contribution by $500 or more. The more traditional PPO plan's cost is rising 11%.

 

[Rustic23]

Ziggy, as most of those concerned with the SS Cola, or at or near Medicare, it would appear the Medicare Part B increase, or in this case lack of, would be more important.

To an early retiree, with a COLA pension and no medical, I not sure who that might be, then rising health care may offset the COLA.

 

[ziggy29]

Ziggy, as most of those concerned with the SS Cola, or at or near Medicare, it would appear the Medicare Part B increase, or in this case lack of, would be more important.

I'm just providing a general point about where other medical plans are going in price next year for comparative purposes.