For the first time since 1975, there will be no Social Security increase for cost of living.
That’s the news from the Social Security Administration about next year’s Social Security payments for millions of Americans.
The amount of any annual Social Security increase is pegged to the inflation rate. Thanks to the global recession and large drops in energy prices, the inflation rate in the U.S. has been negative in 2009, meaning seniors who rely on Social Security won’t see an adjustment in 2010.
To cover the gap, President Obama has proposed a one-time $250 payment to people receiving veterans benefits, disability benefits, railroad retirees and retired public employees who don’t receive Social Security.
However, the White House had no suggestions on how to pay for the plan, estimated at $13 billion, other than to say that the payments would not come out of Social Security funds. The Social Security Administration is slated to pay out more in benefits than it collects in taxes for at least the next two years.
Many people who count on Social Security for most or all of their living expenses are finding that they can make their money go much farther by moving to countries with extremely low costs of living. Unlike Medicare, there is no restriction on where or how Social Security recipients can use their benefits.
Instead of belt tightening, many seniors are simply going abroad and enjoying better lifestyles in places like Ecuador, Belize, Panama, Mexico, and other low-cost countries on Social Security payments that, in the U.S., would barely cover basic needs.
