What’s a senior got to do these days to get a break? It seems everywhere they turn, there’s more bad financial news staring them in the face.
According to recent government reports, Social Security – that seemingly safest of safe havens for retirees – is the latest to take a hit.
Beginning in January, Social Security checks for retirees will remain flat. Normally, these checks get an annual 2 percent to 3 percent hike to combat inflation. Not so this year.
The news of this status quo payout (by the way, this is the first time there’s been no cost-of-living adjustment in three decades) couldn’t have come at a worse time for seniors, particularly those tied to fixed living financial situations.
An AP news report states that “Big job losses and a spike in early retirement claims from laid-off seniors will force Social Security to pay out more in benefits than it collects in taxes the next two years, the first time that’s happened since the 1980s.”
The damage is pretty significant. The deficits are $10 billion in 2010 and $9 billion in 2011.
Is there a silver lining? Well, sort of. Social Security banked surpluses of $2.5 trillion in previous years, so money is there to pay retirees. But we have seen how quickly a trillion here and a trillion there can disappear…
As seniors begin to hear this news about Social Security, this is a perfect time for advisors to step in, calm their fears, and provide a clear roadmap to guide them through the financial minefields.
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