Social Security trustees have announced that, for the first time in the history of the entitlement program’s cost of living adjustments, there will be no increase in benefits for 2010. This comes on the heels of news from the Treasury Department that Social Security will become insolvent four years earlier than projected.
“Today we learned that retirees will receive a stagnant, if not diminished, benefit check beginning next year,” said IRI president Cathy Weatherford. “Since 1975, COLA increases have come to be relied on to help offset the rising costs of essential items, creating a situation where millions of retirees have come to primarily rely on their Social Security checks for guaranteed income each month. Today, we see that guarantee eroding,” said Weatherford.
Weatherford advised that retirees take personal responsibility for planning their retirement and urged them to seek out guaranteed income strategies for retirement. IRI Chairman James A. Shepherdson observed, “The average 30-percent decline in retirement savings accounts over the past year has been particularly difficult for the millions of Americans nearing retirement, as they have a narrowing window in which to recoup their losses. The proverbial three-legged retirement stool has always relied on a mix of sources for retirement income. However, in the years to come we are likely to see insured retirement strategies playing an increasingly important role in individual investments.”