Social Security Table » COLA http://social-security-table.com Mon, 28 Dec 2009 03:53:48 +0000 en hourly 1 http://wordpress.org/?v=3.3.1 Despite Economy, Illinois Social Security Benefits Will Increase http://social-security-table.com/despite-economy-illinois-social-security-benefits-will-increase/ http://social-security-table.com/despite-economy-illinois-social-security-benefits-will-increase/#comments Mon, 07 Dec 2009 07:25:43 +0000 admin http://social-security-table.com/despite-economy-illinois-social-security-benefits-will-increase/
Peter Drummond asked:


If you have been feeling the crunch of finding ways to curb your spending on an already fixed income, then you will be delighted to know that your Illinois social security benefits will increase beginning in January.

The Social Security Administration announced on Thursday, October 16 that social security benefits will increase by 5.8 percent in January 2009. It’s easy to see why most social security recipients will welcome this change. Illinois social security benefit payments have not seen an increase since 1982, well over 25 years ago. Illinois social security recipients may see as much as an additional $63 in their monthly checks. Whether retirees receive Illinois social security checks as an Electronic Funds Transfer or by a paper check, they will find it a bit easier to breathe with an added bonus.

Although many people have felt the strain of increased food and gas prices as well as gas and electricity prices, this Illinois social security increase may lessen the pain of those rising costs. Illinois social security retirees have felt the pressure of having to resort to using their savings accounts as well as reaching into their retirement funds to pay for exorbitant basic monthly bills in addition to medical bills. Retirees and those on disability have felt the pain of rising prices more than most and hopefully the Illinois social security benefit increase will offset some of that sting.

With the market’s unpredictable fluctuations and overall economic unease apparently here to stay, many Illinois social security recipients worry that their retirement plans will also be affected. Furthermore, the Congressional Budget Office predicts that Americans’ retirement plans have actually lost as much as $2 trillion over the past year and a half. This is, indeed, something to worry about and why it’s important to leave some of that 5.8 percent increase from Illinois social security paychecks in the bank.

Due to the Cost of Living Adjustment (COLA), Illinois social security retirees would have seen an even higher increase if it wasn’t for the dip in energy costs at the end of summer. Over the past 15 years, COLA has been much lower, so Illinois social security recipients should be thankful for this higher increase next year. However, the increase may not be enough to recover from recent months’ influx of daily living costs. The highest COLA occurred in 1980 with a 14.3 percent boost, which is nearly three times greater than the one beginning in January 2009. Illinois social security benefits have had an annual adjustment since 1975. If you need more information how this increase will affect your benefits, contact an Illinois social security attorney.

If you currently have Medicare, your Illinois social security benefit increase will not, for most retirees, be affected by higher premiums. However, those who are making more than $170,000 a year will see an increase in their premiums. This may be a relief to those earning below $170,000; however, if you’re in the latter category then your questions can be answered through an Illinois social security lawyer.

 

Whether you receive Illinois social security benefits, SSI, or disability benefits, everyone will see an increase in their monthly payments. Furthermore, if you are married you may see as much as $100 more combined a month.

Politicians and other public policy experts have predicted that social security benefits will eventually run dry and it may be sooner than the 78 million baby boomers who are soon to retire had expected. Although the social security trust fund may run out of funding by 2041, Illinois social security retirees and those who will be retiring in the next ten years will actually pay more into the fund than it collects beginning in 2017.

With nearly 170 million workers paying into the system with social security taxes next year, approximately 10 million of those workers will be paying higher taxes resulting from the COLA increase.

So does this mean that now is the right time to start receiving your Illinois social security benefits? That may depend on several things. Illinois social security recipients, along with those who are planning on starting to receive their social security payments within the next year, should ask an Illinois social security attorney any questions they have concerning their benefits, Medicare payments, social security disability payments and other factors that will affect their payments beginning in January.



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]]> http://social-security-table.com/despite-economy-illinois-social-security-benefits-will-increase/feed/ 0 When to Take Social Security http://social-security-table.com/when-to-take-social-security/ http://social-security-table.com/when-to-take-social-security/#comments Tue, 01 Sep 2009 21:22:45 +0000 admin http://social-security-table.com/when-to-take-social-security/ Shelby Smith asked: social-security2

One of the most important retirement decisions facing most Americans is: WHEN TO START SOCIAL SECURITY BENEFITS. Conventional wisdom has always been “take it as early as possible — age 62″. Why? Several reasons are given: (a) it might not be there if you wait; (b) you can take the benefits and invest them and have more money later; (c) I might die early and never get a dime.

About three-fourths of Americans have heeded this advice and for most it was, or will prove to be, a big mistake. Why? There are several reasons: spousal benefits, higher benefits for delaying, penalties for starting early, penalties if you work while drawing benefits and are less than normal retirement age, and Social Security benefits get favorable income tax treatment.

Spousal benefits: If you qualify for Social Security benefits they will last the rest of your life — what’s more, if you’re married and your spouse is entitled to a lower amount, she/he will “step up” to the higher amount at your death. The spousal benefits say a spouse gets at least 50% (even if they paid zero into their Social Security account) of what the other spouse qualifies for AND the larger amount when the first spouse passes on. So by delaying your benefits your surviving spouse could get a bigger Social Security check every month for the rest of her/his life. Since “break-even” is about age 80 and joint life expectancy is closer to 90 for a married couple age 62, the odds of getting more are overwhelming. In fact, if Las Vegas gave the same odds you’d be booking reservations today.

For every year you delay taking Social Security benefits beyond age 62, your benefits grow between 7.5% and 8.0% annually PLUS a cost of living adjustment (COLA) based on inflation. In the past 30 years inflation has averaged over 3% annually…so your Social Security benefits will grow by over 10% a year. Where else can you get an investment backed by the U.S. Government and pay you over 10% annually? Stop looking, they don’t exist unless you want to take loads of risks. So if you are healthy, married and can afford to wait, postponing Social Security until age 70 will pay great dividends. Social Security will be there because with 50 million current getting benefits and another 76 million (the boomers) coming of age, politicians who vote to do away with Social Security will be unemployed.

If you start benefits at age 62 (the earliest time possible) you get about 25% less than if you wait until your normal retirement age (age 66 for most 62-year olds). This 25% less is for the rest of your life AND COLA is applied to a lower amount to compound the injury. Again, postponing make a great deal of sense.

If you start Social Security before normal retirement age and continue to work, your benefits will be reduced $1 for every $2 you make over about $13,000 annually. Yes, you’ll get this back later but when you consider taxes and the time value of money you’ll be worse off.

The big reason to delay is because Social Security benefits are taxed differently than other income: it is never 100% taxed and it is easy to manage the taxes on your Social Security benefits. PLUS, if taxes rise you’ll want to have as much of your retirement money in tax advantaged places (like larger SS benefits) as possible. Which way to you think income taxes are headed? Let’s see: record federal deficits, fighting terrorism, rebuilding our highways, bridges & infrastructures, an aging population, cleaning up the environment, etc. which must be financed by the federal government with income taxes. No doubt in my mind…how about you?

If you’d like to make sure you get Social Security right — and also take your qualified money (IRA, 401(k), 403(b), TSP, etc.) at the right time and use your other savings & investments wisely, I invite you to read my Guide to Social Security…and a Better Retirement by going to http://www.theretirementpros.com/eReport_Social_Security.php

You’ll have one chance to get Social Security right, so get all the info you can to make a good decision — most Americans haven’t and they’ll pay a lot more in taxes on their retirement money. Less money in retirement means less of a retirement. For more info on Retirement Planning, go to the Retirement Pros website at http://www.theretirementpros.com/

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