Seniors receiving their social security checks in January 2010 may be disappointed to find that for the first time in three decades they won’t receive their cost-of-living adjustment.
The 2-3 percent increase usually hits checks in January of each year in order to keep up with inflation; however, this year, the extra money won’t be there.
How are Increases Calculated?
Social Security adjustments are based on the consumer price index. This index looks at urban wage earners between the third quarter of the current year and the third quarter of the previous year.
Unfortunately, the 2010 cost-of-living adjustment will be based on the very beginning of the financial crisis, which represents sharp drops in prices and deflation.
Looking at Social Security in 2010
Analysts believe that the lack of an increase next year will hit seniors hard. Even though the checks won’t shrink, seniors rely on the annual increase to help them manage other increases surrounding them during retirement, including elevated premiums for Medicare Part B.
In 2009, seniors received an atypical 5.8 percent increase due to the spike in oil prices, so getting no increase the following year will be a hard pill to swallow.
The Good News About Social Security
There is a light at the end of the tunnel, however. To balance the lack of a cost-of-living adjustment, Democratic lawmakers introduced legislation that would provide a one-time payment of $150 to Social Security beneficiaries. They hope this will help lessen the blow some. But in reality, the eliminated adjustment is just another sign that the economy still has a long road to recovery ahead, meaning that seniors will have to take steps on their own to cut expenses and budget wisely to stay afloat.
Will you be affected by the lack of a cost-of-living increase? What steps will you have to take to adjust financially?
Information in this article is subject to change, for up to date information on this topic, please visit our Social Security category.
will this be something that will be reimbursed at a pro-rated amount, or it’s just GONE?
Me and several other folks I know, who received Social Security Retirement checks, have received notices that our January 2010 checks will arrive on the 3rd Wednesday rather than the 4th Wednesday. Can you please explain why we will get checks one week early in January. If that is the case, will our 4th Wednesday payday change to 3rd Wednesday payday for all of the months?
Please advise.
Karen Peterson
Hi Karen,
The Social Security people made a mistake and are not going to change the date of your payments. Here is what they say:
The Social Security Administration earlier this month mailed notices that contained incorrect January 2010 payment dates. These erroneous notices went to about 6 million beneficiaries who receive their payments on either the second, third, or fourth Wednesday of each month, and are part of the annual benefit notices that go to 52 million Social Security beneficiaries. In the notice the payment date is incorrectly shown as one week before what the actual date of payment will be. The other information in the notice, including the payment amount, is correct. Social Security is sending a letter explaining the error to beneficiaries who received the incorrect one as soon as possible.
You can read more about it here:
http://www.ssa.gov/pressoffice/pr/corrected-notices-pr.htm