Social Security Benefits Flatlined Until 2012

Social security, first passed in 1935 as part of Franklin Delano Roosevelt’s New Deal, encompasses a host of social insurance programs, including well-known federal benefits such as temporary assistance for needy families, unemployment insurance, Medicare, Medicaid, and the State Children’s Health Insurance Program.

In common parlance, however, Social Security is usually used to refer to the benefits paid to elderly retirees, officially referred to as Federal Old-Age, Survivors, and Disability Insurance.

Recipients of benefits under the program, numbering around 58 million seniors across the United States, received a stiff dose of reality last week when the government announced that it would not increase benefit amounts this year. Instead, benefits will remain at the current rate until at least 2012. This is the second year benefits for seniors have remained stagnant.

This also marks the first time a year has passed without a benefit increase since the US government enacted automatic inflation adjustments in 1975.

Those measures tie Social Security benefit raises to the Consumer Price Index, an economic measure that calculates inflation by tracking the rise in prices of consumer goods. When inflation is negative or unchanged, as it was both this year and last year, Social Security benefits remain at their current rates.

For currently retired seniors, this may mean tightening your belt. If you’re one of the 64% of retirees who rely on Social Security benefits for your primary source of income, you may have to find places to save.

That can be tough to do when your primary income is the average Social Security check, which amounts to about $1,072 a month. But, don’t get disheartened yet!

Saving money may not mean giving things up. First things first, read more articles here on Dough Roller for tips on how to save money. If you can get the same products and services you need and want for less, you may not need to give anything up. You’d be surprised how much money you can save by shopping around for insurance, and how much a cash back credit card might save you, if you make sure to pay the balance in full every month.

You can also think about part-time employment. For retirees born between January 2, 1943 and January 1, 1955, you can make any amount in earnings and keep your benefits, provided you have reached the full retirement age of 66. Think about starting a small business part-time: teach piano lessons, make and sell crafts, write for publications aimed at seniors.

For those of thus still facing the daily grind, this news offers a sad but teachable moment: make sure you’re fully funding your own retirement.

Save all you can. Determine your financial goals and develop strategies to attain them. If you’re young and you aren’t saving, start now!

Every expert points out that you will miss out on years of potential growth if you don’t start socking money away in your twenties. The more you wait, the more you’ll have to save down the road.

Don’t underestimate the power of finding the broker or bank with the most competitive rates but know that excessive fees will cut into your growth, so find the most competitive online discount brokers or mutual funds that suit your goals and save save save!

Topics: Retirement Planning

19 Responses to “Social Security Benefits Flatlined Until 2012”

  1. Most people forget that when Social Security was passed in the ’30s, the average life expectancy for men was 63.6 and 65.9 for women with a retirement age of 65. Congratulations men, you get to contribute but on average you don’t get to receive any benefits! Ladies, you get benefits for about 11 months on average! Thank you, oh kind and generous Federal Government!

    It was passed without any long term thinking about the implications. How many other programs have passed without consideration of the long term implications?

    • I’m in shock over all the talk about cutting social security benefits. I am a 72 year old woman, still working part-time (making almost nothing) so my S.S. benefits are my main source of income. What does the Gov expect those of us on S.S.,who are unable to find work, to do. We cannot depend on our children because they are struggling in this economy. It is my understanding that the S.S. fund has 30 decades of money to pay S.S. benefits to those who qualify. The government needs to stop dipping into this fund to fight wars and pay those in the legislature. It sucks and I feel it is Un-American.

      • Reason


        No one is talking about cutting YOUR benefits. That’s just scare talk by the Democrats. What is being suggested is that those NOT NOW on Social Security, and under 55 years old, that they be given a choice as to how much and when and how they want their SS handled. There are exceptions, and rules that will protect people who are unable to fend for themselves. BUT, non of that will affect you or anyone now over 55. Here’s the question for you to answer: Do you want the government to do nothing and your children and gran children have no SS as we go bankrupt?

        I know it’s tough at 72 to get the truth from all those liars in the Obama camp, but that’s what you need to do. Otherwise you will continue to believe that you are going to be forced to eat cat food.

        • GET A GRIP….don’t you peope realize that ex Pres Bush starting this mess with putting out money to other countries ? Wake up and get you head out of the sand. Reps are for $ $ ..Dem are for the people. It will not take Pres. Obama 1 term to get this mess cleaned up, he said that straight out. Get on the web and research it was decided when bushy was in office that we would NOT get a raise until 2012. Don’t you have anything else to do but complain…that GOD for what we get.

          • To @M, I laughed when I read your comment about “Pres. Bush starting this mess with putting out money to other countries?” ARE YOU SERIOUS?? Give our money to other countries has been going on for decades if not a century. The reason Social Security has not had a raise is because the inflation rate went down. Maybe YOU should get on the web and research how these decisions are calculated. I don’t agree with the governments formula for inflation because, and I believe, they don’t add in inflation for food or energy. And please don’t buy the stupid line that it’s all Bush’s fault!! If Bush was SO BAD then why is Obama doing the exact same thing that Bush did, only 10 times worse….spend way too much money. Bush was not conservative that is for sure but this problem has been talked about and has been culminating for decades as well. It is out fault for letting all of the politicians get away with massive spending.

  2. My question is this: I’ll be 62 next year. I’m stilling working and will probably need to do so for a 2- 5 yrs. Can I start drawing Social Security check next year and still continue to work?

  3. deanna gibson

    I, am an American, and i agree with the fact tha Mr. Obama, does not know what he is doing.Stop giving to the people overseas, and send the people that are not born here, back to where they came from…
    I, have a 33 year old daughter that is mentallly affected after having spinal meningitis, and i am the one caring for her.She is on ssi, and i recieve a small ssi check and i am drawing off of my first husband ss, every month and trust me when you pay rent of 700 dollars a month, you have no other money.We all need help in this world, but at times why should we not get what we have worked so hard for, I,only hope the people of the United States put a president in that has just a little brains….thank you

  4. Why is it that our government gets their raises and we do not get our raises in SS. Now they have said next year, 2010, we still won’t see a raise ? The Government has no right to use our money for their own use, literally giving it away to people who have never paid into it-ever-, and using our money to their advantage. This is criminal…

  5. Robin Clark

    I am a woman that is 50 and i get SS.D i can{t work because of my back and legs and my hands that i am with pain everyday if they cut S.S on us that mean i guess i will be in the streets liveing and with no food i pay 75000 in rent a month plus all the bills so what are we sepose to do please don’t cut S.S cut waste and Loopholes and stop giving money for the other countries and worry about the USA for a change thank you Robin Clark Philadelphia PA

  6. And to all those seniors complaining that their SS is all they have….all I have to say is it is not the responsibility of the Government to plan for your retirement, IT IS AND ALWAYS HAS BEEN YOUR RESPONSIBILITY!!!! Your financial situation is no ones fault but your own. The Democrats have definitely succeeded in making this country dependent on the Government. Hell, look at London, they are rioting over there because the Government can’t afford the “Nanny State” anymore and the people have become so dependent they can’t even function so they are taking to the streets and burning the place down.

  7. Sue Spencer

    For those of us who are getting social securityon disability, we can’t go out and get a part time job; and we make just enough to be enable for entitlements. Some people who receive Disability SS are healthy enough to supplement some to their income, but not al arel. We have to pay Medicare insurance premium of about $110 per month and then pay an insurance company a fairly high premius also as well as pay for the cost of the medicine. Full price of meds up to a point, then we can pay less for them but we barely get there and it’s another yr rolls around and we start over.

  8. Arman Capan

    How can we continue living with no Social Security Increases while prices on everthing is going-up. How come we have money to send all-over the world for the need of other countries yet we have no funds for our people who need the most!!!!!!

    Thank You,

  9. Arman Capan

    Question ? How come our government has enough money to send all-over the world , yet we don’t have enough money to be able to give small increase to the social security recipients , same time the prices on everythin is constantly going-up .
    Thank you,


    Notice the increase when the republicans can back with a slight more to the senatoral understanding…Democratic in office spend to much time partying and the republicans spend so much time cleaning up the mess of bill clinton ,mcdonald days of parties with his body guards…..Now with crap rumma almost leaving.. The republicans are coming back to reclaim the hard efforts of cleaning up bill clinton’s mess which took two terms just to come up with stimulus check before craprumma came in to destroy it to look good in the people eyes….Complaining about republican leadership.One thing i always notice is when americans elect a republican to office people complain but the real effort of quality is thier..When it finally time to unveil the work ,americans elect democratics and they try to take credit for the works of the republican party….craprumma prove they don’t have a legal idea of substances to maintain a focus of laws and managing the country to bring better ….Now election time again …Craprumma trying to look good after holding funds for ss and ssi to appear in good standing…Or it’s the republicans coming back in terms of the election wins across the USA that is making a differances to betterment..Republicans may not like a certain democratic but they stay true to the laws,when democratics don’t like they make death threat or become severely rude.Making good changing hard to do for the country….Most important is not to elect the same problem like the last 3 years so far……


    As for increase i believe base on the current time it should $1,900.00 a month to better the seniors income and young issues for being on social security and $1,700.00 a month for lesser serious individuals….For thoses on ssi $1,900.00 a month to $1,600.00 a month to insure betterment of health ……When life get better for the reason all concern are on the ss or ssi is to help bear with life responsibilities until such issue for the individual ssi/ss better or when they pass on for a life time of service to the USA ……With the proper amount this might lesson the stimulus amount for complete sturdy approach for benefits to help thoses on ssi and ss ….For workingclass Stimulus that would probably be $900.00 a year plus increase starter pay of $15.00-$17.00 an hour would be like (1940’s .40 cent an hour)plus with half the state taxes applied to the earned income it makes for more productive ,situation in society..and o% percent taxed by the ferederal tax.For big bosses on management as always with the lower version supervisers with a $21.50 -$29.00 an hour

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