Showing posts with label income. Show all posts
Showing posts with label income. Show all posts

Tuesday, February 1, 2011

How to Tweet Your Way to Retirement Goals - US News and World Report

U.S. News and World ReportImage by afagen via Flickr
By Emily Brandon

The fastest growing group of Twitter users isn't 20-somethings—it's 50-somethings. Some 11 percent of Internet users between ages 50 and 64 used Twitter in 2010, more than double the 5 percent who did in 2009, according to a Pew Research Center survey. And one of the major topics of conversation among 50- and early 60-somethings on Twitter is retirement.

Depending on who you follow, Twitter can help you keep up with the latest retirement research and ask the company that administers your 401(k) questions. The social networking website can also be a place to interact with financial advisers and advocate for better retirement benefits. Here's how to tweet your way to better retirement preparedness.

[See 5 Alternatives to Traditional Retirement.]

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Sunday, January 30, 2011

KUNC: More Retirees Reliant on Social Security, report says (2011-01-27)

(2011-01-27)
(KUNC) - Reliance on social security has increased dramatically in Colorado and across the nation. That's according to a report released today. And it comes at a time when lawmakers are debating how to reform what's viewed as a broken system.

More than 89 percent of Coloradans of retirement age are tapping into social security. The nonprofit Institute for Women's Policy Research says nationwide reliance on the benefit for a prime source of retirement income over the past decade has increased 6 percentage points among men and 4 points for women.

"It's bigger than all other income sources combined," said Heidi Hartmann, executive director of IWPR. "Some people have earnings, some have pensions, some have assets. But 90 percent of the retired have social security."


KUNC: More Retirees Reliant on Social Security, report says (2011-01-27)
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Saturday, January 29, 2011

Retirements Swallowed by Debt - NYTimes.com

Image representing New York Times as depicted ...Image via CrunchBase
By SHERISSE PHAM

Bill Freedman, 86, felt financially secure. He had a comfortable income from Social Security, an I.R.A., investments and an inheritance. But when he took a fall last October, his daughter, Nancy Freedman, went to his Manhattan apartment and found several credit cards piled up in a desk drawer. After making a few phone calls, she discovered he was $15,000 in debt.
. . .
Study after study shows that more elders are living with heavy credit card debt, regularly swiping cards to pay for things like gas and groceries. And as the balances pile up, the elderly cope in a number of ways. Some, like Mr. Freedman, permit their adult children to step in, while others seek outside counsel in an effort to preserve their independence. Some elderly debtors are trapped in limbo, too proud to ask for help but too strapped to pay off the debt.
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Saturday, January 8, 2011

H.R. 150: To amend the Internal Revenue Code of 1986 to repeal the inclusion in gross income of Social... (GovTrack.us)

To amend the Internal Revenue Code of 1986 to repeal the inclusion in gross income of Social Security benefits.

Sponsor:
Text:
The text of this legislation is not yet available on GovTrack. It may not have been made available by the Government Printing Office yet.
Status:
Occurred: IntroducedJan 5, 2011
Occurred: Referred to CommitteeView Committee Assignments
Not Yet Occurred: Reported by Committee...
Not Yet Occurred: House Vote...
Not Yet Occurred: Senate Vote...
Not Yet Occurred: Signed by President...
This bill is in the first step in the legislative process. Introduced bills and resolutions first go to committees that deliberate, investigate, and revise them before they go to general debate. The majority of bills and resolutions never make it out of committee. [Last Updated: Jan 6, 2011 11:29AM]
Last Action:
Jan 5, 2011: Referred to the House Committee on Ways and Means.

Current Status

H.R. 201: To amend section 12 of the United States Housing Act of 1937 to treat income changes resulting... (GovTrack.us)

Elton GalleglyImage via Wikipedia
To amend section 12 of the United States Housing Act of 1937 to treat income changes resulting from welfare program requirements for families residing in housing receiving project-based subsidies under section 8 of such Act similarly to such changes for families residing in public housing or receiving tenant-based assistance under such section.

Sponsor:
Text:
The text of this legislation is not yet available on GovTrack. It may not have been made available by the Government Printing Office yet.
Status:
Occurred: IntroducedJan 6, 2011
Occurred: Referred to CommitteeView Committee Assignments
Not Yet Occurred: Reported by Committee...
Not Yet Occurred: House Vote...
Not Yet Occurred: Senate Vote...
Not Yet Occurred: Signed by President...
This bill is in the first step in the legislative process. Introduced bills and resolutions first go to committees that deliberate, investigate, and revise them before they go to general debate. The majority of bills and resolutions never make it out of committee. [Last Updated: Jan 7, 2011 12:04PM]
Last Action:
Jan 6, 2011: Referred to the House Committee on Financial Services.


Click for Current Status
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Monday, January 3, 2011

Poll Spotlights Perceptions of Boomers on Aging, Retirement, Work - AARP Bulletin

AARP MembershipImage by Flicrk via Flickr
by: Carole Fleck | from: AARP Bulletin

They came of age starting in the turbulent 1960s amid the Vietnam War, the fight for civil rights and women's rights. Today, America's largest generation, the boomers (those born 1946-1964), still question authority and have a strong social conscience, according to an AARP Bulletin poll on perceptions of boomers.

The oldest of the boomers are turning 65 this month. Yet at least two in three boomers — who were 46 to 64 years old when the poll was done in November — fear aging, think that the term "senior" doesn't apply to them and believe that they'll be healthier in retirement than their parents were, the survey found.

But they may not be better off financially. Only 43 percent of 1,507 people age 18 and up surveyed say they believe that boomers will have more money in retirement compared with their parents' generation. Among the boomers polled, 45 percent of those ages 46 to 53, and 54 percent of those ages 54 to 64, agree.

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Sunday, October 17, 2010

New Small Business Law Could Have Big Effect On Retirement Accounts

A new law aimed at helping stimulate small business job growth through tax deductions could have major consequences for anyone with a retirement savings account at work, a University of Illinois expert on taxation and elder law notes.

Law professor Richard L. Kaplan says an obscure provision in the recently enacted Small Business Jobs Act allows 401(k), 403(b) or 457 account holders to convert their retirement savings into a tax-advantaged Roth-version of the same account.

The good news, according to Kaplan, is that by converting to a Roth variant, income can grow completely tax-free because no tax is assessed when funds are withdrawn from a Roth account during retirement.

The bad news: Those who convert retirement savings account to Roth plans must report the amount converted as income, a move that could potentially bump them up into a higher tax bracket.


Source: Phil Ciciora University of Illinois at Urbana-Champaign
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Monday, October 4, 2010

Women's Institute for a Secure Retirement Fall Updates

Greetings!
We are pleased to share the Fall 2010 Newsletter: Stashing the Cash! Do You Have Too Much? Are There Guarantees?

This issue focuses on providing information on options fFall2010 Newsletteror cash investments. There's a lot of buzz about people putting too much cash for too long into savings or money market funds, where interest rates can't get much lower. Cash is really important for emergency funds, but may not be appropriate for long-term retirement savings. This article will provide some helpful advice on how you should be stashing your cash and where the guaranties are.

Sincerely,
cindy signature
Cindy Hounsell
President
Women's Institute for a Secure Retirement
www.wiserwomen.org
Read/Download Newsletter

Friday, September 24, 2010

Young or old: Who’s suffering more in this economy? | Analysis & Opinion |

An old Social Security card with the "NOT...Image via Wikipediaby Mark Miller

The numbers are dismal: the U.S. Census Bureau reports that the poverty rate rose sharply last year to 14.3 percent, the highest since 1994. Forty-four million Americans were below the official poverty line, and one out of every five children were considered poor.

If there’s a silver lining in the annual poverty report, it seems to be this: Seniors were relatively unscathed by the harsh recession that started in the fall of 2008. The poverty rate for Americans over 65 fell from 9.7 percent to 8.9 percent. And, while income was flat or down for every other age group, seniors’ income rose a whopping 5.8 percent.

At first glance, the numbers seem to point to a generational divide, with older Americans in an economic lifeboat at a time when the ship is going down.

Unfortunately, the lifeboat is leaky, too. Social Security has played a critical role lifting millions of seniors out of poverty, but the big gains last year are due to a series of one-time events that won’t be repeated. In fact, the long-term economic prospects for older Americans are no better than those facing younger age groups.
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58% of older women rely on Social Security for more than half of their incomes.

Modern Social Security card.Image via WikipediaNearly six in ten (58.3 percent) of women age 65 or older receiving Social Security benefits relied on these benefits for half or more of their income in 2008, compared to just over half (50.3 percent) of older male beneficiaries. Older African-American and Hispanic women are especially reliant on Social Security, with almost three in ten (29.2 percent and 28.0 percent respectively) having no other source of income in retirement, almost double the share of white women (16.6 percent). These statistics are from the Social Security Administration.
Source: Social Security Administration, “Income of the Population 55 or Older, 2008,” April 2010, Tables 9.B1, 9B4.

Facts of the Day | Retirement USA
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Friday, September 17, 2010

$6.6 Trillion Shortfall, Gap in Retirement Income Need, Savings, Money - AARP Bulletin

MoneyImage by TW Collins via Flickrby Carol Fleck

U.S. households with workers in their peak earning years face an astounding $6.6 trillion gap between the money they'll need for retirement and the money they'll have, according to a new analysis by the Center for Retirement Research at Boston College.

The advocacy coalition Retirement USA revealed the dramatic gap Wednesday at the kickoff of a monthlong "Wake Up, Washington!" campaign.
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Monday, September 13, 2010

How Retirement Planning Shortchanges Women - WSJ.com

An assortment of United States coins, includin...Image via WikipediaBy RESHMA KAPADIA

After a long career managing large accounts for an insurance company, Lynn Brooks is hardly a financial novice. But when she sought help from a financial adviser after her husband died, they might as well have been speaking different languages.

Ms. Brooks, who's now 60, knew she had reached the age when her savings should be managed conservatively. Her adviser, however, had something more testosterone-fueled in mind, urging her to buy riskier assets like small-cap stocks. And when she phoned him, she says, he was often in a hurry: "It was as if he was saying, 'Leave me alone. I'll take care of this.'"

Ms. Brooks says she eventually took her business elsewhere -- but only after her nest egg had shrunk 30% over the course of a decade before the crash.
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Wednesday, August 11, 2010

GRAY MATTERS: The Consequences of Unequal Wealth Distribution

by Saul Friedman

Shirley Sherrod had it about right when she said,
“Y’all, it’s about poor versus those who have. It’s really about those who have versus those who don’t. And they could be black, they could be white, they could be Hispanic...”
That wasn’t exactly the whole truth, for she and her husband. Charles, were ardent, longtime civil rights activists who understood that years of racism, played a large role in perpetuating the ignorance and poverty in the south among blacks as well as whites.

(Racism is here defined as the belief among many whites, supported by the law, that Negroes were inferior. Only in America did the Supreme Court, in Dred Scott, hold that black slaves were chattel, less than human.)

Overcoming that sad heritage, Ms. Sherrod, who has spent a lifetime helping in the struggles of the poor of all shades put her finger on a fundamental human problem in much of the world, especially the United States - the unequal distribution of wealth among too many of us.

That is the subject of a new book that has become the rage among social scientists and activists in Europe, especially Britain. It’s called The Spirit Level: Why Greater Equality Makes Societies Stronger, written by British public health researchers Richard Wilkinson and Kate Pickett who have produced an unprecedented rediscovery of the causes of so much of today’s anger towards the institutions of government and finance.

The book was called to my attention by a Canadian reader, Dr. Rob Dumont, a PhD, from a prominent and wealthy family. In a reply to one of my pieces on poverty, he quoted from the book to tell me that according to its central thesis, the growing gap in many countries between the haves and the have-nots is responsible for more than the misery of poverty.

According to the book, such health and social problems as “Obesity, Mental illness, drug and alcohol abuse, homicides, imprisonment rates, lowered life expectancy, overconsumption of resources, teen pregnancy and the lack of social mobility,” all have in common strong links to inequality of wealth.

Interestingly, the authors, who have exhaustively documented their work, do not denounce the wealthy. Rather they point out that the most affluent citizens as well as the most wealthy countries also suffer from these ills. Their analysis mocks the American Declaration of Independence which proclaimed, “all men are created equal.” The original sin of slavery gave lie to that promise and the lack of equality has taken a toll in this nation even today.

As one knowledgeable Amazon reviewer, Dr. Nicholas P. G. Davies, a Briton, wrote,
“Inequality issues are often presented as being about the poor, but this book shows we are all poorer for living in more unequal societies. Inequality is as bad for the rich as it is for the poor. Society is poorer as inequality becomes greater.”
As Wilkinson and Pickett make clear with dozens of graphs, which rate the nations based on the problems that come with inequality,
“The impacts of inequality show up in poorer health, lower educational attainment, higher crime rates, lower spending of social capital, lower cooperation with and trust of government.”
One graph that shows the “health and social problems are worse in more unequal countries,” makes these points:
“The U.S, Portugal and the United Kingdom rate high in the amount of income inequality. For the U.S., low taxes (by international standards), a weak trade union movement, low minimum wage and a tradition of individualism have resulted in a high level of income inequality.”
Indeed, the U.S., with its obsession with the market economy, has modest social programs, Social Security and Medicare, while most of the other 20 nations listed are social democracies with a broad array of social insurance benefits, including universal health care. Canada is roughly in the middle of the pack, along with France, Spain and Switzerland. Japan and the Scandinavian nations have the lowest income inequality, offering cradle-to-grave social programs.

Some critics suggest that the book cherry picks its statistics and the alleged problems to prove their point. But who could argue with the graph that puts the U.S., the richest country, almost off the charts showing the relationship between a huge income gap – perhaps the highest among civilized countries – and such health and social problems as infant mortality, higher than most European nations, homicide and imprisonment rates (the highest in the world), obesity, child well-being (poverty among children has reached new heights) and drug and alcohol addiction?

Any thinking American can verify the sad truth in another graph that shows these health and social problems are worse in more income-unequal states. With the rise of unfettered rapacious, anti-labor capitalism, which touted sweatshops and child labor, income inequality rose to criminal levels.

And today, as you might expect, the southern states, namely Mississippi, Louisiana, Alabama, Texas, Tennessee, Kentucky, West Virginia and Florida “have high levels of income inequality and much poorer outcomes in the health and social areas.”

These states also have the highest levels of poverty and the lowest levels of education attainment, and in the last couple of years, income inequality has become worse throughout the United States, especially in the industrial north, as a result of the 2008-9 recession which has increased home foreclosures, personal bankruptcies and the numbers of Americans – nearly 50 million – struggling against poverty or near poverty.

Yet at the same time, the rich are becoming obscenely richer. Michelle Singletary, reported in the Washington Post last month that while the average income for the top one percent of earners rose 281 percent, or $973,000 per household, in the last decade, the bottom fifth saw their incomes increase 16 percent, or $2,400 per household.

Former Labor Secretary Robert Reich, who wrote the forward for the American edition of the book, noted that today’s CEOs are paid more than 350 times that of the average worker. Surely we’ll see the results of such inequality in health and social problems in the next few years.

In his inaugural speech, President Obama said, “The nation cannot prosper long when it favors only the prosperous.” But that’s exactly what has happened as bankers have made huge profits and gotten scandalous bonuses while real unemployment reaches towards 15 percent.

Franklin Roosevelt fought the economic royalists of his day to help Shirley Sherrod’s Georgia get electricity and survive the Great Depression with the Tennessee Valley Authority and the Works Progress Administration. What has Obama done?

One can blame the Republicans or the U.S. Senate, but where is the leadership of the President? It won’t do to give Ms. Sherrod a job. Platitudes like, “I feel your pain,” are not true. It might help to use the powers of his federal government to put Americans to work. But as she said,
“Folks with money want to stay in power and they’ll do what they need to do to stay in power...It’s always about money, y’all.”
Find out more about Spirit Level, at the excellent British web site, The Equality Trust, which supports the messages in the book.

Write to saulfriedman@comcast.net
 ============================================



Friday, August 6, 2010

Income Level for Individuals Eligible for Legal Services Corporation Assistance

The Legal Services Corporation (``Corporation'') is required by law to establish maximum income levels for individuals eligible for legal assistance. This document updates the specified income levels to reflect the annual amendments to the Federal Poverty Guidelines as issued by the Department of Health and Human Services.

Effective Date: This rule is effective as of August 6, 2010.
Final Rule
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Thursday, July 15, 2010

Benefits Payable in Terminated Single-Employer Plans; Interest Assumptions for Valuing and Paying Benefits

SUMMARY: Pension Benefit Guaranty Corporation's regulation Benefits Payable in Terminated Single-Employer Plans prescribes interest assumptions for valuing and paying certain benefits under terminating single-employer plans. This final rule amends the benefit payments regulation to adopt interest assumptions for plans with valuation dates in August 2010. Interest assumptions are also published on PBGC's Web site (http://www.pbgc.gov).

DATES: Effective August 1, 2010.

Additional Information
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Tuesday, July 13, 2010

TIME GOES BY | Reverse Mortgages – Part 3: Finding a Lender

by Ronni Bennett

First, two EDITORIAL NOTES about reverse mortgages:

Item 1: They are not as complex as some would have you believe, but there are a lot of details and they are not to be taken on lightly. Ninety-five percent of all reverse mortgages are HECMs (Home Equity Conversion Mortgages) - that is, insured by the FHA under regulations of the U.S. Department of Housing and Urban Development (HUD).

Jumbo reverse mortgages, sometimes made by private lenders, are not insured by the FHA or regulated by HUD. These would be reverse mortgages for amounts larger than $625,500, which is the lending limit of a HECM.

Personally, I would consider no other kind and HECMs are the only ones about which I am writing in this series. I cannot answer questions about any other sort of reverse mortgage.

Item 2: You may have seen a short piece about reverse mortgages in the current Time magazine written by Stephen Gandel. Nearly every sentence contains false or misinformation and half-truths including this:
“[A reverse mortgage] gives the homeowner the value of their house minus the cost of the loan in exchange for the right to sell the property when the person or persons die or move out.”
No, you do not get the full value of your home, only a percentage of it, and the bank does not have the right to sell the property when the owner dies or leaves.

You or your heirs have the right to pay back the mortgage and retain ownership if you or they choose to do so - a sort of first refusal before the bank may sell the property. If the bank sale nets more than the mortgage, that amount it returned to the owner or heirs.

So only the part about “minus the cost of the loan” is correct.

AN EXCELLENT RESOURCE
If you are seriously considering a reverse mortgage for yourself, I recommend you download an informative and easy-to-understand booklet recommended to me by Dr. Barbara Stucki, vice president of home equity initiatives at the National Council on Aging.

Researched and produced by the MetLife Mature Market Institute with the National Council on Aging and titled The Essentials: Reverse Mortgages [pdf], the Q&A format clearly answers almost any question about HECMs you can imagine.

QUALIFYING FOR A REVERSE MORTGAGE
There are only two criteria to qualify for a reverse mortgage: you (and all other borrowers who are co-owners) must be at least 62 years old and you must live in your home as your principal residence for at least six months of the year. That's it. There are no employment, credit, income or other requirements common to traditional “forward” mortgages.

Eligible properties include single family homes, town homes, certain condominiums (condominia?) and some mobile homes.

Any existing traditional mortgages and lines of credit must be paid off at closing with funds from the reverse mortgage. So, obviously, if existing liens are larger than the allowed reverse mortgage amount, you will not be eligible for a HECM.

LOAN AMOUNT
The maximum allowed HECM mortgage is $625,500. The amount is based on a formula of age, current interest rates, value of your home and the type of reverse mortgage you select. You can get a general idea of the amount from several anonymous reverse mortgage calculators on the web. Here are a few:

AARP
All Reverse Mortgage Company
Ibis Reverse Calculator

The results may vary slightly from one to another, but are good for a ballpark figure.

WARNING: There are many online reverse mortgage calculators, most from mortgage lenders. Do not use a calculator that requires your name, address, phone number, email, etc. unless you look forward to being spammed from reverse mortgage companies and whomever they sell their lists to for the rest of your life.

FINDING A LENDER
One of my first questions was, how do I find a reputable HECM lender? (Are there disreputable HECM lenders?) Do I just walk into banks and ask about a HECM loan? How do I find banks that makes these loans?

It's the one question none of the reverse mortgage informational websites directly address.

Fortunately, the HUD website maintains a list of HUD-approved reverse mortgage lenders in every state which eliminates the reputation question leaving only competency to be determined on your own.

Fill in the form and you'll get a page with lenders in your area. A couple of clues to make it easier:

Uncheck “title 1” to reduce the number of returns
Be sure to check the HECM box
Ignore the 203k box; it doesn't apply

I limited my search to those in the suburban town where I live. HUD came up with eleven matches each of which included company name and address, date it was approved to handle HECM mortgages, telephone number and email address – the last sometimes a person and sometimes a generic email box.

Last Monday evening, I sent this query note, including my name, email address and telephone number:
I obtained your email address from the HECM-approved lender list at the HUD website. I live in Lake Oswego and am looking into the possibility of a reverse mortgage. I am 69, own my home outright and am interested in what you can offer. May we speak on the telephone sometime this week?”
Of the eleven email messages, three were immediately returned as undeliverable due to this or that technical problem. Of the remaining eight, three contacted me within 24 hours. As of today (Thursday afternoon), I have not heard from the other five and am now as disinterested in them as they apparently are in my business.
A lesson from this is that if, in searching for a lender, you want more choices than three, enlarge the search area on the HUD website from, for example, your town to your state. Until or unless a reason appears to talk with more lenders, I am sticking with these three.

They are all friendly, well informed about HECMs and two in particular (let's call them A and B) had as much enthusiasm for helping elders improve their lives via reverse mortgages as I have for the topic of aging in general. All three have years of experience as reverse mortgage originators; they know the issues and facts, and have the answers.

A and B skillfully talked me through the information they needed to help me make choices about a reverse mortgage and on a couple of points, both were perceptive enough to ask questions that gave me valuable, new insight to my notions about money at this stage of my life. This is not to say that C did not ask the right questions, only that the conversation was more superficial than with A and B.

Soon after our conversations, all three emailed me estimates of the mortgage terms with costs spelled out for several types of funds disbursement such as:
  • a lump sum

  • a line of credit

  • monthly payments to me

  • several combinations of two or three of those options
Of course, the numbers are only estimates until my home has been appraised by the FHA. When I have selected a lender to work with, I will try to get a sample “estimate page” to show you online.

WHAT'S NEXT?
All three lenders asked to see me in person to go over the choices, costs, possibilities and to answer all my questions and concerns. I have appointments with each for next week and will report back to you.
The FHA requires all HECM applicants to undergo counseling with an FHA-trained expert in reverse mortgages. The price is $125 which can be paid up front or added onto the loan. After I have met with all three lenders next week, I'll schedule the counseling and when that is finished, I will make my choice about whether to go ahead with a reverse mortgage and if so, with which lender.

TIME GOES BY | Reverse Mortgages – Part 3: Finding a Lender

Wednesday, June 30, 2010

John Boehner: Raise Social Security Retirement Age to 70 - Political Hotsheet - CBS News

John BoehnerImage via Wikipedia
House Republican Leader John Boehner said in an interview with the Pittsburgh Tribune-Review out today that he would back raising the Social Security retirement age to 70 for those who will not retire for another 20 years.

The comment - along with Boehner's statement that the financial reform compromise reached last Friday creates a bill that amounts to "killing an ant with a nuclear weapon" -- has drawn the attention of Democrats eager to cast the GOP as uncaring about the problems of average Americans.
John Boehner: Raise Social Security Retirement Age to 70 - Political Hotsheet - CBS News
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Monday, May 31, 2010

TIME GOES BY | GRAY MATTERS: Preserving Social Security

by Pulitzer Prize-winning journalist Saul Friedman

It’s past time that Social Security’s advocates, friends and beneficiaries quit playing defense for the single most popular American program and take the offensive against those who attack and lie about Social Security with intent to kill it.

First, find out if you have an IRA or other retirement saving accounts with a bank or brokerage or investment house that has been calling for the privatization of Social Security. If so, transfer the account (without penalty) and tell the broker why.

My broker/financial adviser with Merrill Lynch, is a champion of Social Security as a necessary and dependable leg of one’s retirement income. Ask your broker/financial adviser where he/she stands on Social Security privatization, i.e., changing it from pension and disability insurance into millions of 401(k)s subject to the rock and roll of the stock market.

If you’re affluent enough to have invested with the Blackstone group, transfer your money elsewhere. The hedge fund, whose trade in funny money helped bring on this recession, was founded by billionaire Peter Peterson, who retains an interest in the firm and spends millions through his various foundations to undermine Social Security with the claim that the program and the benefits for the undeserving elderly population’s are bankrupting the nation.

Second, Social Security advocate organizations and politically active beneficiaries and older members can join in the new effort by the National Academy of Social Insurance to expand Social Security to resume the coverage of 22-year-old students, especially the disadvantaged, which was ended in 1981, when Social Security was in imminent financial danger.

Such an expansion could dovetail with the new health insurance reforms which mandate coverage on their parents’ policy for children up to age 25. And it would not only help these families and kids pay for college, but it would strengthen the Social Security system with support from the young which has been eroding as too many the mainstream media buy into the Peterson nonsense that Social Security is in financial trouble. It isn’t.

Indeed, the 75-year-old program, which is in the black for another 30 years even if nothing is done, will outlast Blackstone as it has outlasted Lehman Brothers, Bear Stearns. Enron, Eastern Airlines and the Pennsylvania Railroad, a few recessions and lots of wars.

During those years, Social Security has never defaulted on a payment. Indeed, it expanded to cover the disabled and the spouses and children survivors of beneficiaries who died before age 66, like those killed on 9/11.

And since the fixes of 1983-4 by the Reagan administration and Alan Greenspan’s commission, Social Security has run a surplus every year, enough to guarantee benefits for the huge boomer generation. Even this year and next, when high unemployment forces the program to pay out more than it takes in in payroll taxes, Social Security will still run surpluses of more than $100 million.

That should lead defenders to their main point, which they should repeat like a mantra: Aside from its administrative costs, Social Security’s benefits for 50 million Americans does not contribute even one dollar to the federal deficit. Let me repeat for reporters who are too lazy to understand Social Security: Aside from its relatively small administrative costs (which are in the Social Security Administration’s budget), Social Security adds nothing to the deficit.

In fact, Social Security earns around $700 million a year, financing the federal debt by selling the Treasury its low-interest special issue bonds. Social Security could solve its long term fiscal problem if it could sell the government higher-interest bonds. But, of course, that would raise the deficit.

Ignoramuses suggest that these bonds in Social Security’s West Virginia vaults are nothing more than “worthless IOUs.” As the Chinese, Japanese and other investors know, U.S. IOUs are as good as cash. Indeed, if you examine your paper money or your employer’s check, they are IOUs until you spend or cash them out.
If the IOUs were “worthless,” why would Peterson and his greedy Wall Street and hedge fund investment banking allies be so eager to get their hands on the $2.5 trillion in Social Security bonds? What a tasty dish to set before the kings in their counting houses!

A friend at AARP says it will do no good to bash billionaires. I disagree because their message, backed by their money and the megaphone of the media, conservative Democrats in the Congress and the hysteria over the deficit has undermined support for Social Security and Medicare. And AARP has not been aggressive in helping to challenge Peterson and his deficit hawk allies who have been given aid and comfort by the administration which was bullied into creating the anti-Social Security commission on the deficit.

Fortunately, the latest defense and offense on behalf of Social Security has come from a definitive report on the future of the program prepared with the help of the Congressional Budget Office and published by the Senate Special Committee on Aging.

The seemingly alarming news is that Social Security faces a $5.3 trillion shortfall over the next 75 years. But the committee chairman, Senator Herbert Kohl (D., Wis.) echoes the current conclusion of Alan Greenspan, the Academy of Social Insurance and nearly every other expert, that the shortfall could be fixed with what Kohl called “tweaks.”

For Kohl and most advocates, cutting benefits is not an option, nor is reducing the criteria for the mandated cost of living (COLA) raises. And Kohl rejects the report’s suggestion that the future fiscal problems could be solved by raising the retirement age from 66 to 70. That would solve only 30 percent of the shortfall, and would delay and thus rob millions of workers of the benefits they now expect and count on.

Besides, many blue collar workers in tough, physically demanding jobs should not be required to work until 70; a coal miner may not be able to keep working after 66.

There are more likely alternatives which are obvious and simple: As the Social Security Trustees’ conservative outlook for the future reported last year, a 1.1 percent raise in the workers' and employers' payroll tax (now at 6.2 percent each) would wipe out the shortfall for 75 years. The trustees, incidentally, base their estimates on 1.5 percent annual growth in the GDP, which is far less than the past years.

More popular with the Obama administration, if Congress abolished the $106,800 cap on the wages subject to payroll taxes, the entire $5.3 trillion shortfall would disappear. Obama has suggested raising the cap to $250,00. Interestingly, several of the nation’s more honorable billionaires, like Warren Buffet and Bill Gates - junior and senior - have called for an end to the cap, noting that they are paying no more in Social Security taxes than a well-paid secretary.

As far as I know, they do not hold that Social Security’s assets should be put up for grabs on Wall Street. But then Buffet and the Gates's helped create wealth and something tangible, instead of a house of paper that collapsed.

You can see the Aging Committee’s information as well the views of advocates at the Committee's website, and you may read or download the full report here (pdf).
Write to saulfriedman@comcast.net


TIME GOES BY | GRAY MATTERS: Preserving Social Security
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Sunday, May 23, 2010

Ireland Centenarian Bounty

Presidential flag of Ireland.Image via Wikipedia

The Centenarian Bounty is the award made by the President of Ireland to people living in Ireland who have reached the age of 100 years. The eligibility criteria for the Centenarian Bounty extend to include centenarians who are Irish citizens born in the island of Ireland and are resident outside the State.

The following supporting documentation is required to confirm the age, identity, place of birth and Irish citizenship of the applicant:

Applicant’s civil birth certificate and/or Irish passport. In cases where an applicant’s surname is different from applicant’s name at birth, please provide a copy of marriage certificate or other documents;

Two recent proofs of identity (such as photo i.d. and/or copies of official correspondence addressed to applicant e.g. regarding pension, utility bills, or nursing home paperwork etc.)

Officials of the Department of Foreign Affairs may seek additional material in order to confirm an applicant’s details and will be happy to discuss with applicants, or their representatives, the type of material that will meet the requirement for supporting documentation.
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Saturday, May 8, 2010

TIME GOES BY | GRAY MATTERS: Safest Reverse Mortgage

by Saul Friedman
Welcome to Older Americans Month, the theme of which, according to President Obama, is “Age Strong, Live Long.” I’ll buy that. And he pledged again that his administration is committed to strengthening Medicare, Medicaid and Social Security.

So why is he scaring the hell out of older Americans by appointing a commission filled with deficit hawks who threaten to cut benefits from these programs, including Social Security which adds nothing to the deficit but helps finance it?

But I digress from my purpose this time, which is to tell you that there’s a way, not used often enough, to protect yourself against too many medical bills, high property taxes and the downers in your retirement savings plans. I am referring to the federal government’s reverse mortgages which too many beleaguered older Americans have ignored. Some don’t want to mortgage a home that’s free and clear; some are discouraged from tapping the equity in their homes by children who are waiting for their inheritance.

So here’s some welcome news for older Americans who own their homes and can use some extra income and cash. The up-front costs for many FHA-guaranteed reverse mortgages have gone down, which means the possible proceeds will go up by as much as $10,000.
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