Friday, February 27, 2009
Social Security recipients get a "mere" $250 "bonus"
Walter Updegrave has an article on CNN’s “Ask the Expert: Stimulus: What’s In It for Retirees?” The article was reproduce don Yahoo! Finance Feb. 26. The Social Security Administration's own website does not appear to mention this payment yet.
Well, not too much. People living largely off of social security will get $250 bonus (instead of the $400 “work-pay credit” for most people) because this time around the government wants to focus on the working middle class. The stimulus could rise for retirees who also work, but this is complicated by early retirees by the Social Security Annual Earnings Test, which has always seemed unnecessary to me (because the payment, if you retire early, is automatically less anyway by an actuarially determined amount).
The $250 social security recipient “bonus” applies even if you owe no income tax – which is good because of many of us sold securities at a loss in December in order to wipe out any income tax liability for this year and try to recover some of the stock market losses indirectly. (That makes things even worse for the federal deficit and for the economy as a whole, if you think about it.)
Updegrave says that the stimulus payments should start to arrive within about four months of President Obama’s signing on Feb. 17, 2009.
President Obama does not seem to have made any specific proposals yet about reforming social security or trimming benefits or upping retirement ages.