I was sent an article that recently appeared in the McDowell News, a local paper in the mountains of NC, that details a new scam meant to first scare people about Social Security and falsely uses a reputable source in the community as a source of the information. The end goal is for people to send small amounts to them in which they use for their own purposes. Just want everyone to be aware of this as there are too many people trying to take advantage of Senior Citizens. Here is the link to the article. McDowell News
No doubt about it. One of the best features of Social Security is the Cost of Living Adjustment or COLA. This past year came as a surprise for many as there was no COLA and thus no increase. Now I know what you are thinking that my grocery bill went up, my health care went up, my homeowner’s insurance went up. In fact, most things did increase in price, but what you actually pay has little to do with how the COLA is figured. COLA is based on what is known as CPI-W or Consumer Price Index for Urban workers. This index is very beneficial for the government to use as it is below CPI as a whole and it does impact retirees income. In fact, some experts estimate that Seniors have lost 23% of their purchasing power since 2000. This is not good news for retirees. To add to the pain medicare premiums have increased for some too and are expected to continue to increase above the COLA. For retirees, that means less in your pocket. There is a little good news for those currently receiving benefits. The law provides some protection for you. If there is no cost of living increase, the premiums for those who are receiving benefits does not increase. This does not apply to those that have chosen to delay benefits. Now this might seem like taking benefits earlier might be a good move. In reality, it does not. You trade off the increase of 8% increase per year delayed for a short term gain in income. Also when COLA’s are reinstituted you play catch up until you pay the same as those that had the initial increase. The last time this happened, retirees were back to the same level in three years. So imagine you made an emotional decision without evaluating the long-term effect on your income. Now for the rest of your life, you get less money, all to get a short term gain for a couple of years. So why the bad news? My goal with education is to keep you from making mistakes that way too many people make. In this case, we may have another year with no COLA and while that is not the best situation, I hope that you will look at the long-term picture and make an educated decision based on the facts and your long term income. If you have questions give us a call. We are here to help.
Thanks to Tim Tucker and World Builders for affording me the opportunity to share my expertise on Social Security and Retirement Resource Management. With the gas shortage, I realize that some of the people from Eastern NC that planned to attend were not able, but we will do it again. Many good questions were asked and many myths were dispelled. One of the reasons I love to provide the education is to set the record straight on Social Security. With the recent changes, there is still quite a bit of misinformation out there. The openness of the group and willingness to ask questions made for an enjoyable evening. If you are interested in learning more about Social Security please look at our upcoming events for details.
I just got back from Nashville TN where I provided education for the Society of Financial Service Professionals, a group of over 25 CPA’s, Attorney’s, Insurance Agents and Financial Advisors. I had been invited to come to help them better understand Social Security and how to better educate their clients on the subject. The presentation was Using Social Security, the Red-Headed Stepchild, in Retirement Planning. The truth is that Social Security is probably the most overlooked component of retirement planning and in reality one of the most important. There were excellent questions and quite a few misconceptions were addressed. We spend some time on the new rules but also on how to use the old ones better for their clients. Once of the core values of my company is education and I believe by helping others have a better understanding all benefit. Here is what one of the organizers of the event had to say about the presentation.
It happens all too frequently on Twitter. Someone without any credentials writes a piece that says you should always take Social Security as early as possible. Their rationale is that you may have to live to your early 80’s to break even. What they fail to understand is that Social Security is often not based on a single life but the joint life of a married, divorced or widowed spouse. Social Security is very complex and something I learned long ago is to never say always. Continue Reading