Uptick for retiree checks in 2021 amid coronavirus worries

[Omaha Steve]

Source: AP

By RICARDO ALONSO-ZALDIVAR and ANDREW TAYLOR

WASHINGTON (AP) — Social Security recipients will get a modest 1.3% cost-of living-increase in 2021, but that might be small comfort amid worries about the coronavirus and its consequences for older people.

The increase amounts to $20 a month for the average retired worker, according to estimates released Tuesday by the Social Security Administration. That would follow a 1.6% increase this year in the cost-of-living adjustment, or COLA.

The COLA affects the personal finances of about 1 in 5 Americans, including Social Security recipients, disabled veterans and federal retirees, all in all some 70 million people.

The economic fallout from the virus has reduced tax collections for Social Security and Medicare, likely worsening their long-term financial condition. But there’s been no real discussion of either program in the personally charged election contest between President Donald Trump and Democrat Joe Biden.



FILE - In this Feb. 11, 2005 file photo, trays of printed social security checks wait to be mailed from the U.S. Treasury's Financial Management services facility in Philadelphia. (AP Photo/Bradley C. Bower, File)


Read more: https://apnews.com/article/virus-outbreak-joe-biden-donald-trump-medicare-archive-b71b35f7cf238811342caeda8fd541ca

[Karma13612]

1. And the expected increase

In Medicare premiums will all but erase that pitance of an increase.

[Bengus81]

2. Maybe only a $4.00 increase for 2021 but it's not known yet

Last edited Tue Oct 13, 2020, 11:27 AM - Edit history (1)

But...I know that COX is going to jack my HSI rate and I'm guessing 10% at least since they skipped last year. That would be another $9.00 and added to Medicare increase then $13.00 of the SS raise is already gone. That also doesn't take into account the hike that United Health Care did to my supplemental plan.

I would need around $38.00 per month more in 2021 just to break even on those hikes and that doesn't even count the non stop food price raises and utility rates that always go up.

[Karma13612]

9. Yes, you are right

On all the increases totally out of our control.

Depending on which advantage plan i select, i might see a drop from $10 per monthly currently, to $0 premium next year. I certainly hope that is the case.

But, this pittance increase in SS benefits is crazy.

StartIng next year, I am thinking of taking distributions on my very very meager 401K. I wanted to wait until I am 70, but it just isn’t possible. So, I will now have to find out how convoluted it is getting distributions, the taxes on the money, and how long they expect it to last. I didn’t realize, but there are all sorts of rules and tables of life expectancy to deal with for my own 401K money.

There is way too much Out of my control over how my finances work.
And I wish some would stop saying that they don’t care about the stock market. Thanks to over eager financial investment philolsophies and practices many years ago, pensions were put into the stock market. I worked for an ad agency that did that. And then most recently, my last employer before retirement did the same thing. My money is in the stock market. The rationale is that it is the best bet for investment.
But, now it is laughed at and resented. I can’t sleep at night whenever the president goes on another tirade. Or oil prices bottom out.
I wish i could take all my money out and put it into a simple safe savings account. But, it is locked away behind rules, taxes and procedures I have yet to crack.
Sickens me.

[DeminPennswoods]

18. Not convoluted at all

You tell your IRA investment broker how much you want withheld in federal taxes and that is automatically withheld from your distribution. The IRA investment broker will figure out your yearly distribtution and advise you of it each year. You can also take all your money in a lump sum and invest it in something else.

I'm not sure how it is this year, but in 2008/9 after the great recession, you could withdraw IRA funds early without penalty.

[Karma13612]

19. Oh! OK!

Maybe I need to stay away from Internet info and just call my advisor! He is thru my bank and is a nice chap.
thanks for giving me these pointers!

[DeminPennswoods]

20. Yes, your financial advisor is the best person

to talk to about beginning withdrawals from your IRA. He or she should be able to tell you what, if any, penalties apply to withdrawals before age 70 1/2. You can go from there as far as what options are available.

[Wicked Blue]

3. I wonder how to spend the 2 cents or so

that will likely be left over after Medicaid. Can't even buy two pieces of bubblegum with that any more.

[Delphinus]

4. And I am

truly in the midst of having to think about retiring (hours to be cut). When they get cut this time, I would be better off getting on SS because it will pay me more.

[marie999]

6. Depending on your age, you can earn at least $17,000 a year

and still collect Social Security without a penalty.

[Delphinus]

7. Oh ...

I could keep my job AND get Social Security? (62+4mo)

[marie999]

8. Check with Social Security to get the exact figure.

If this were normal times, people like you would probably hold off getting Social Security if they are healthy. Unfortunately this is not normal times and I imagine that more people are taking early Social Security just so they can pay their bills.

[Delphinus]

15. Exactly.

Thank you for your kindness and reaching out.

[marie999]

16. You're welcome. Hope everything works out for you and yours.

[EndlessWire]

22. Yes

That's correct.

But, when I was working and wanted to collect SS and reduce hours at work, they wouldn't let me! In order to collect, I had to quit my job!

It turned out okay, because I was getting sicker and ultimately couldn't work at that time. But, even though I thoroughly discussed the situation, they were adamant that I couldn't start SS at that time. I was over 62, had enough credits, etc., but they said no.

I thought that they would take away the money that was over the limit until I could straighten everything out, but, no...they absolutely wanted me unemployed. Never made any sense to me.

[Sherman A1]

5. Better than nothing and better than many folks in the workforce are getting

still, certainly not enough considering the costs increase that we will see in health care and have seen in groceries.

[BumRushDaShow]

10. Ahhh good! I have been watching the quarterly estimates through the year for CSRS COLAs

(which tracks with the SS COLA) and it wasn't looking good -

Federal Report
January’s CSRS, FERS, Social Security and COLA outlook is grim
By Mike Causey @mcauseyWFED
September 3, 2020 1:00 am
5 min read


Fortunate federal retirees, like people who get Social Security, usually get a catchup-with-inflation increase in their benefits the first of each year. That cost of living adjustment reflects changes in the inflation rate as measured by the Bureau of Labor Statistics, for the previous year for those retired under the old Civil Service Retirement System.

For Federal Employees Retirement System retirees it’s usually a diet COLA that is one percentage point less than the actual rise in inflation as measured by the BLS. But for 2021 that COLA may be minimal for CSRS and Social Security retirees, and zero for those who retired under the FERS program. This is incorrect: If the COLA is less than 2% which it’s likely to be, the FERS COLA is the same as the SS COLA.

With one month left to go in the COLA countdown period, low inflation for 2020 means that the maximum inflation adjustment for CSRS, military and Social Security retirees next January could range from 0.5% by the most conservative estimate and as “much” as 1% by the most optimistic estimates. The actual January 2021 COLA for CSRS-Social Security-Military retirees will be the average of the increase in the July, August and September Consumer Price Index-W over the same period last year. The majority of current federal retirees are under the CSRS program. But a growing number of people who worked under the FERS system join the ranks of the retired each day.

Bottom line: Neither group is going get a large COLA if any next year. Fed Smith says the COLA could be as much as 1%. AARP says the increase could be between 0.4%-1%”. “Thanks in part to the economic impact of the COVID-19 pandemic, don’t bank on a big cost-of-living adjustment for your Social Security benefits in 2021. Experts are looking for about a 1% increase starting in January 2021, and possibly less. “‘Obviously, the amount of the COLA hinges on the economy, which has picked up in the past month,’ says David Certner, AARP’s director of legislative policy for government affairs. ‘We have a shot at somewhere between 0.5% and even as high as 1%.’

https://federalnewsnetwork.com/mike-causey-federal-report/2020/09/januarys-csrs-fers-social-security-and-cola-outlook-is-grim/

I'll take what I can get and 1.3% is bigger than their "1% max" estimate!!

[DeminPennswoods]

21. I thought it might be another COLA-less year

I'm happy to be getting a COLA after all.

[LogicFirst]

11. The formula for COLA should be changed.

The current method means a person receiving $1,000 a month will get $13.00, but a person receiving $2,000 will get $26.00. However, the cost of living went up the same for both recipients. Everyone should get the same amount, not an amount based on percentages.

[yaesu]

12. 1.3%? what a fucking joke after wall street banksters get 7+ trillion handed to them. nt

[Vinca]

13. When we were notified of our raise, I raced to tell my husband about our pending lifestyle

change. We get to buy a couple of more bags of cat litter each month! Woo hoo!

[Cryptoad]

14. Considering ,,,

Toilet Paper went up 900%,,,,,,,,not much relief

[GoneOffShore]

17. That will just about but not quite cover the hit I'm getting because of the exchange rate.