I feel like everyone I talk to says their company is either eliminating raises for the year or some are even doing salary reductions. It looks the Social Security Administration is following suit. I didn’t realize this, but this will be the first year since 1975 that Americans receiving Social Security checks will not receive their cost-of-living adjustment (aka COLA).
According the ABC news article: Social Security Benefits – No Increase in 2010…
Under the law, social security payments are supposed to increase anually if U.S. consumer prices increase. But over the last 12 months, prices have declined. Specifically, the CPI-W — the price index upon which social security adjustments are based — has dropped 1.7 percent since September, 2008.
Many, including President Obama and the AARP, are calling for Congress to approve a $250 stimulus payment to seniors and other groups, including veterans and those receiving disability benefits, to compensate for the lack of a COLA.
“This additional assistance will be especially important in the coming months, as countless seniors and others have seen their retirement accounts and home values decline as a result of this economic crisis,” Obama said.
So is this a good thing or a bad thing?
Obviously, not getting a COLA if you were planning for it would make things challenging, but could there be a silver-lining? Could this be an indicator that a U.S. government organization is learning how to say NO to spending? Whether we like it or not, if the government can’t control spending, it will run out of money. I realize that I am saying this while we are in the middle of spending the gazillion dollars dedicated to Economic Stimulus, but could it be that some government organizations are learning to live on a budget?!
A positive sign?
If so, this could be a very positive sign for our future. I am planning for my future like Social Security will be bankrupt and that I won’t receive any benefits. But, since I have paid into it and will continue to pay into it, I do hope that is around when I retire and when my kids retire. And, let’s be honest, with current government spending out of control, there is no way it’s still going to be around without saying no to a lot of people.
So, what say you? Do you wish the government paid out the COLA to the Social Security recipients this year or is this just like taking a bad tasting dose of medicine that will ultimately help us?
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Bob,
As a Social Security recipient, I will gladly do without the COLA if it is indeed a sign that government is practicing some restraints. However, if that is the case, why is President Obama wanting this $250 stimulus to seniors? Seems like the right hand doesn’t know what the left hand is doing.
Joe, I am in complete agreement with you on this. I am disabled, so I do get Social Secutity. I will gladly forgo the COLA. I just can not understand where the stimulus would make it better.
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