Retirement Planning Blog

The coming year is going to have no Social Security increase for the retirees. According to an announcement of the Social Security Administration, there won’t be any increase in Social Security cost-of-living for the retirees in 2010. And it is going to be for the first time since the automatic increment of inflation came into effect in 1975 that a particular year won’t see any adjustment in Social Security payments.

Currently, the Social Security payments are linked with the Consumer Price index for the Urban Wage Earners and the Clerical Workers. There has not been any increment in the Consumer Price Index between the third quarter for 2008 and 2009. As per the current law, the existing Social Security beneficiaries are going to receive the same amount as they used to get last year. Unlike this year, last year saw the highest increase in cost-of-living adjustment since 1982, when the recipients received a cost-of-living adjustment of 5.8 percent as the consumer price suddenly rose up due to higher gas price. Social Security plays a major role in maintaining the standard of living for the Americans. One can earn a maximum amount of $106,800 subject to the Social Security tax.

In order to fight against the dormant retirement benefit, President Obama gave his nod to the one-time payment of $250 for the seniors and people with disabilities. As per the proposal, 49 million Social Security recipients, 5 million Supplemental Security Income recipients, 2 million veterans, 1 million public-employee retirees, and 500,000 railroad retirement and disability recipients are going to get checks by mail. Only one time payment will be made per individual. It would cost the government $13 billion.

According to the American Reinvestment and Recovery Act, there is a provision to extend the measure for an additional year. In May 2009, $250 was distributed to every senior as economic recovery payment, which cost around $1.37 billion. In the coming year, it is estimated that more than 50 million people will be benefited from this relief, which in turn, will also be helpful for the economy as a whole. As the values of retirement  homes and accounts are declining day by day, the seniors will be in need of such assistance in the coming days.

Retirement is certainly not the end of ‘working world’, at least in these days! More than 15 percent of the American Seniors with age of 65 and above haven’t bid adieu to their working lives completely. According to a recent report from the American Community Survey (ACS) of the Census Bureau, 62 percent of these working seniors prefer to work part-time. But which is most striking, is the fact that more than one-third (38 percent) of them are still working 35 hours a week or more.

According to Braedyn Woodring and David Howard, researchers of the Census Bureau, many seniors retired from their full-time job but chose to work part-time in order to pursue other work-related interests and also to increase their earnings in their post-retirement days. There are also some seniors who do not retire and continue working full-time. And the reason is quite simple – either they do not want to retire from their work, or have inadequate retirement savings.

If we give a close look on the available data, we can find 52 percent of the seniors with an age of 65 or more work full-time in Columbia district, whereas the percentage comes down to 27 in Wisconsin. The higher percentage of full-time working seniors can also be found in other places in U.S. like Nevada (44 percent), Texas (45 percent) and Puerto Rico (48 percent).

When it comes to post-retirement working, men have a little domination over the women. In 2008, about 42 percent of older men worked for full-time, whereas only 33 percent older women worked for full-time in the same year. It has also been observed that the percentage also vary from state to state. The percentage of full-time working seniors (male) ranges from 60 percent in Washington, D.C. to 31 percent in Wisconsin. Similarly, the percentage for women ranges from 45 percent in Nevada to 21 percent in Vermont. However, analysis is yet to be done as why the percentage varies between states.