Saturday, October 16, 2010, AM | 2 Comments
The Social Security Administration announced on Friday that Social Security benefits will not increase automatically next year. The reason is that inflation has been low for a couple of years now. This is the second year in a row that the benefits have not been adjusted for inflation. The Social Security Administration’s announcement applies not only to retirees but millions of disabled workers and survivors of deceased workers.
The announcement comes at a time when millions of retirees have only Social Security monthly payment to depend on. Their savings and other investments, if any, have dwindled because of the lousy return they have been getting.
The average Social Security benefit is around $14,000 and experts say about one-third of retirees rely on the payouts from the government-run program for more than 90 percent of their income.
The maximum amount of wages that are taxed for Social Security program will also remain the same next year at $106,800, the Social Security Administration said.
Overall consumer prices rose 1.1. percent from a year ago, while core prices were up 0.8 percent over the past 12 months.
President Obama is backing House Speaker Nancy Pelosi when, on Thursday, she announced a plan to provide a one-time payment of $250 for Social Security recipients as well as veterans. It will be voted on after the November 2 election.
In general, Social Security faces a major uphill and increasing financial strains as the 77-million-strong baby boom generation retires. Experts say that the program’s trust fund would be exhausted in 2037 and the program would only be able to pay out a portion of promised benefits.
In a Nutshell
Unless the President and Congress come together and come up with a solution, our retiring population would have a hard time coming up with resources that will sustain basic human needs such as food, clothes and shelter. The American dream will ultimately go down the drain. We still have time to come up with some kind of solution.