3 Ways Your Social Security Payments Are Already Being Cut

[defendandprotect]

3 Ways Your Social Security Payments Are Already Being Cut

Policy experts have focused on alternative ways of eliminating Social Security's 75-year financing gap, but lost in the debate is the fact that even under current law Social Security will provide less retirement income relative to previous earnings than it does today. Combine the already legislated reductions with potential cuts to close the financing gap, and Social Security may no longer be the mainstay of the retirement system for many people.


In 2002, the frequently quoted replacement rate for the "medium earner" who earned about $42,000 in today's dollars and retired at age 65 was 41%; that is, Social Security benefits were equal to 41% of the individual's previous earnings. Under current law, three factors will reduce this replacement rate: 1) the extension of the full retirement age; 2) the increase in Medicare premiums; and 3) the taxation of Social Security benefits.

1. The Extension of the Full Retirement Age
2. The Increase in Medicare Premiums
3. The Taxation of Social Security Benefits


http://finance.yahoo.com/focus-retirement/article/112844/3-ways-social-security-payments-being-cut-smartmoney?mod=fidelity-livingretirement&cat=fidelity_2010_living_in_retirement


Just for the record --

[DJ13]

1. #4 - Unrealisticly low COLA that fails to keep up with real inflation

For two years in a row theres been no COLA.

Who here honestly believes that the cost of living hasnt risen by a substantial amount since 2009.

[Auntie Bush]

2. My SS went down $41.00 this year. I knew it wouldn't increase but

I didn't know I'd get so much less. I assumed it was because Medicare deduction was increased. If that happens yearly I'll be screwed.

[doc03]

5. I thought the if there wasn't a COLA increase the

Medicare premium couldn't be increased? I am 63 and not eligible for Medicare myself but I have seen what happens to my mother's SS. Every year that she received a COLA increase most of it was taken back with an increase in Medicare premiums. The last couple years prices for food and utilities are going through the roof and no COLA.

On edit: Yes we are screwed, we have Republicans that just refuse to agree on anything and Democrats that will let them get away with it.

[sad sally]

7. 2012 will bring pain, no gain...

While Social Security recipients won’t be learning officially about a cost of living adjustment (COLA) for 2012 until mid-October, early indications point to a slight increase with a BIG BUT --- that should spur comments via letters to the editor sections of newspapers and complaints to members of Congress and the White House, learns Grumpy Editor.

In short, it’s like a magic trick. Now you see it, now you don’t.

Social Security trustees project a 1.2 percent COLA. But the trustees also project the Medicare Part B premium for most will jump to $113.80 a month next year from $96.40 a month this year, on par with 2010. Unless further inflation (which most media and government officials continue to label “tame”) registers on government computers between now and September when the 2012 Social Security COLA is calculated, it will mean less in-pocket monthly Social Security payments for most of the 45 million recipients next year than in 2011.

As an example, a monthly Social Security payment this year of $1,000, less $96.40 for Medicare Part B premium, nets a recipient $903.60. For 2012, figuring current projections, a $12 increase to $1,012 monthly payment, less Medicare Part B premium of $113.80, will give that person $898.20 --- or $5.40 less per month in pocket.

That’s how an increase (certainly to be emphasized) actually winds up as a decrease. But wait. Monthly benefits could be even less. President Barack Obama projects an under one percent COLA (0.9 percent, to be exact) in his spending proposal for the budget year starting Oct. 1.

http://grumpyeditor.typepad.com/grumpy_editor/2011/03/higher-social-security-benefits-seen-for-2012-but.html?du

[unkachuck]

4. yep....n/t

[Philippine expat]

3. Old news

n/t

[doc03]

6. It may be old news to you but some of us need to be

reminded just how bad we are being screwed.