topic Re: Ask the Expert: Social Security in AARP Rewards Connect

Ask the Expert: Social Security

AARPLynne — Thu, 09 Dec 2021 16:07:36 GMT

AARP Social Security experts Joel Eskovitz and Jim Palmieri will lead the conversation and answer your questions around Social Security benefits as part of our Savings and Planning Theme Month. Join us here to learn more about the expected cost of living adjustment (COLA) for 2022 and how AARP can help answer your top questions about Social Security benefits.

Please note: experts do not answer a Member’s personal questions, but offer insights and general guidance into best practices, tips, resources – including the AARP Social Security Resource Center.

Learn and Earn! Ask a question of our experts to earn 50 points awarded via code emailed to you after you participate (one entry per week given points). Ends October 25.

Re: Learn, Earn & Discuss Social Security - COLA

canebug — Thu, 14 Oct 2021 19:05:22 GMT

I own a house with another person and bought another house on my own. He doesn't want to sell. He can't buy me out. If I quit claim deed I'll lose everything on the first house. I currently live $66 over the US poverty level. The approximately $77 increase will not cover increased med and pharmacy costs. What can I do. I currently don't qualify for "extra help?

Re: Ask the Expert: Social Security

AARPLynne — Mon, 18 Oct 2021 12:24:21 GMT

Good morning and welcome. Thank you for being here. Let's get started by having Jim and Joel tell us what the recent COLA means to Social Security recipients.

Re: Ask the Expert: Social Security

JoelE238769 — Mon, 18 Oct 2021 13:29:39 GMT

The short answer is that for a worker earning the average amount of Social Security benefits, the 5.9% increase results in an extra $90 in your bank account every month in 2022. The idea behind this adjustment is that you don’t lose spending power as the cost of goods increases. Of course, given how volatile the cost of certain goods has been since the start of the pandemic, and what you individually spend your money on, this may not be enough to keep pace with the higher costs. Without getting too in the weeds, this increase reflects the changes in costs of a variety of goods and services from October 2020 to October 2021, so whether it will truly keep pace if prices continue to rise in 2022 is a bit of an open question because we don’t have any ability to accurately forecast what things will look like over the next 12-14 months.

Re: Ask the Expert: Social Security

ss1867 — Mon, 18 Oct 2021 23:20:29 GMT

Given the increase in Medicare premium isn’t this just about a wash?

Re: Ask the Expert: Social Security

dt324 — Mon, 18 Oct 2021 23:23:28 GMT

With a rent increase (leasing home), inflation in food and gas, rising prices for pet supplies, and a deplorable income tax rate for a senior on fixed income, the SSA increase ($144 per month) will be welcome but just barely leave me where I am right now (stressed and practically in poverty, so just one day at a time here).

Re: Ask the Expert: Social Security

d953405f — Mon, 18 Oct 2021 23:41:36 GMT

With inflation and all- is there a plan for increasing income for seniors.. How bout less taxes? It is difficult to live with what is going on.. Has any more been said re prescription drugs and making them more reasonable for senios?

Re: Ask the Expert: Social Security

st9155 — Tue, 19 Oct 2021 00:24:15 GMT

Do we yet know what the increase in the Medicare premium is?

Re: Ask the Expert: Social Security

ArriettaL74592 — Tue, 19 Oct 2021 00:37:31 GMT

I agree completely. Medicare premiums, Part B supplemental insurance, Plan D, and co-pays and deductibles, cost us between 20-25% of our social security income. Then they tax us on that income! We pay way more for health care as retirees than we did as employees. I think the whole Medicare system is a bad joke, and don’t get me started on how confusing they make it. It’s just plain crazy. I was looking forward to retirement until I learned what health care was going to cost us. And I naively thought Medicare was going to take care of us. I am so discouraged.

Re: Ask the Expert: Social Security

DJB75 — Tue, 19 Oct 2021 01:00:27 GMT

Besides the taxes already being taken out of SS checks, how can I know how much additional I will have to pay due to the increased monthly amount? I am 71 and have to work to make ends meet as it is, and I’m taxed as if I was a wealthy person, not an elderly man barely hanging on.

Re: Ask the Expert: Social Security

GailL1 — Tue, 19 Oct 2021 01:22:03 GMT

Don't need any rewards points but have a question -

Is it true that if the COLA was based on another CPI indexed formula (the R-CPI-E rather the CPI-W, as now) which includes other type of expenses that hit seniors $$$ harder (like Medical expenses) then the COLA would be higher. If so, how much how much higher? From my readings on it, it appears to be a pretty minuscule amount - at least yearly, maybe more over the length of retirement. Other than Medical and Medicine, what other categories of expenses are considered between these two CPI indexes being compared in this research?

Re: Ask the Expert: Social Security

dt324 — Tue, 19 Oct 2021 03:56:47 GMT

Very sorry to read about the travails everyone else is experiencing. I'm 70.5 and all I can attest is that if you're healthy with no prescriptions, the system works just fine (because it's costing basically nothing for you to be a member). I know I'm very partially subsidizing a bunch of others who really need these benefits, and that's OK with me (might be their turn to reciprocate someday) because I'm still in good health with no drugs (just alternate day vitamin supplement and morning coffee plus plenty of fruits and vegetables - not a vegan, just that meat and dairy are not the mainstays of my diet but more like occasional treats).

Re: Ask the Expert: Social Security

dt324 — Tue, 19 Oct 2021 04:06:06 GMT

While reasonable legislation with regard to senior income (your SSA will increase by up to 5.9% starting in Jan 2022) is before Congress right now, we now have a Congress that can't manage to get anything, even when it's got 80% or 90% support, done, If that offends you as much as it does me, don't vote for incumbent Republicans next time (but the progressive Democrats would be a good choice).

Re: Ask the Expert: Social Security

ReTiReD51 — Tue, 19 Oct 2021 10:38:39 GMT

I’m sorry I didn’t see this topic sooner. My reward is “I wake up in the morning, just glad my boots are on instead of empty in the whispering grasses down at forest lawn” … Bruce Springsteen.

I’d like to ask the expert’s 2 questions and if they only answer one that’s fine.

What do you think of the Trust Act of 2021?

What do you think of the present administration wanting those making $400,000 and up to pay FICA payroll taxes? Which would help to expand and strengthen the social security trust fund.

Thanks in advance for your answers to my questions.

Re: Ask the Expert: Social Security

g373896p — Tue, 19 Oct 2021 12:18:28 GMT

When someone has their social security payment lowered because of a government pension offset, does that also impact [reduce] their share of the divorced spouse's social security?

Re: Ask the Expert: Social Security

JimLPalmieri — Mon, 25 Oct 2021 16:04:46 GMT

@dt324, we're very happy to hear you are in good health, which takes on greater importance as we get older. I also like a good cup of java in the morning.

Re: Ask the Expert: Social Security

JoelE238769 — Tue, 19 Oct 2021 13:26:13 GMT

@ss1867 and @st9155, thank you for your questions. Medicare premiums for 2022 have not been officially announced, and that news is expected in November. For the roughly three in four Medicare Part B recipients whose premiums are deducted straight from their Social Security benefit payments, that could mean a reduction but it is unlikely to swallow your entire cost-of-living adjustment, as it has done in previous years. Experts are anticipating an increase around $10 a month for Part B premiums, and if the average increase in monthly benefits is $90, then you would only see a slight decrease in your take-home benefits.

Re: Ask the Expert: Social Security

JoelE238769 — Tue, 19 Oct 2021 13:29:24 GMT

@d953405f AARP certainly understands what you are dealing with in terms of prescription drug costs. Although that is a bit out of my wheelhouse, I encourage you to get involved with our campaign to lower prescription drug prices, found here.

Re: Ask the Expert: Social Security

JoelE238769 — Tue, 19 Oct 2021 13:34:20 GMT

@DJB75 The increase we are speaking about here is an increase in Social Security benefits. Your payroll taxes will stay the same (6.2% of your paycheck, or 12.4% if you are self-employed). The only change on that side of the ledger for 2022 is that the cap on income taxed for Social Security moves from about $143,000 to $147,000, but it does not sound from your question as though you would be impacted by that change.

Re: Ask the Expert: Social Security

JimLPalmieri — Tue, 19 Oct 2021 13:42:31 GMT

Good morning, @GailL1 You are correct; the cost-of-living adjustment (COLA) is based on changes in the CPI-W, more formally known as the Consumer Price Index for Urban Wage Earners and Clerical Workers. According to the Social Security Administration (see A6 reform provision here), switching to the CPI-E would increase the annual COLA by about 0.2 percentage points on average. For just a year or two, the impact is small; however, over a 20 to 30-year period of receiving benefits the difference can add up. The difference largely comes from the greater weight the CPI-E puts on medical costs.