Tuesday, August 30, 2011

Words of Wisdom

Life flies past us so swiftly that few of us pause to consider those who have lost the tempo of today. Their laughter and their tears we do not even understand for there is no magic that will draw together in perfect understanding the aged and the young. There is a canyon between us, and the painful gap is only bridged by the ancient words of a very wise man ---

“Honor Thy Father And Thy Mother”

Source: from the feature film of 1937, “Make Way For Tomorrow”.

Monday, August 29, 2011

The State of Social Security

The National Committee to Preserve Social Security and Medicare (NCPSSM) recently made three videos containing questions and answers about the state of Social Security. What follows are the notes I took while viewing these videos:

  • The amount in the Social Security trust fund is 2.6 trillion dollars. It will grow to 3.7 trillion dollars over the next ten years. It is rock solid and has the full faith and credit of the United States government. The bonds are valid and will continue to pay full benefits.
  • Those on Social Security did not receive a cost of living adjustment in 2010 and none in 2011. The formula did not allow it because it’s not based on inflation that impacts seniors but rather it is based on inflation that impacts wage earners. Those on Social Security need a different formula. One that will keep up with the costs of living, not one that ignores it. The new formula being considered by the right wingers does just the opposite. It actually says that the zero cola that seniors got in the last two years was too generous. The new formula is called the chained CPI and would mean a cut in benefits because the COLA is compounded.
  • The wage cap or the amount of earned income that a worker pays into Social Security goes up a little each year. Today it is $106, 800, so the person who earns $106,800 this year pays the same as someone who earns $106,800,000. Is that fair? President Obama has proposed having those who earn over 250 thousand dollars pay more. The amount workers used to pay covered 90% of earned income but now, for millionaires and billionaires it’s only about 80%.
  • All income is subject to Medicare tax. The wage base could be phased in like Medicare to lift the cap.
  • Social Security has always run a surplus. It should not even be part of any discussion to lower the national debt. It should be taken off the table. It doesn’t need to be done right now but sometime in the next ten or fifteen years. It needs to be done in a thoughtful, responsible way.
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  • Social Security is not an entitlement. It is entirely self funded and an earned benefit. Medicare is partially subsidized by the employer and medicaid is welfare. Some members of congress are saying they want to change the program for younger people and that it won’t affect older people. That is a lie. If younger people don’t pay, it would affect the trust fund. To say privatizing Medicare won’t affect older people is a lie as well. When people reach the Medicare age the voucher won’t be enough to cover  medical expenses.
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  • People have to be in the United States legally to receive Social Security. Illegal immigrants cannot receive benefits. SSI is not Social Security. It’s just administered by Social Security. It’s paid out of the general treasury and is for a disabled child, but it doesn’t come out of the payroll tax.
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  • The cola is compounded and over time a reduction in the COLA will have a negative impact on Social Security benefits.
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  • The Chained CPI will probably be brought up in the “super committee”. The chained CPI is a target. If the cost of something goes up, you might change to something cheaper. The idea is that if the price of something goes up, such as gasoline, people may substitute and go to public transportation or bicycles or even walking. Absurd. It ignores health care costs and the kinds of services that seniors use.

Sunday, August 28, 2011

Old saying

Birds of a feather flock together, so do rats and pigs.

The tea party is a very sad lot

A few days ago, a tea party guy tried to tell me that SSI (supplemental Security Income) came out of Social Security taxes. He was wrong.

The SSI (supplemental Security income) program makes payments to people with low income who are age 65 or older or are blind or have a disability.
The Social Security Administration manages the SSI program. Even though Social Security manages the program, SSI is not paid for by Social Security taxes. SSI is paid for by U.S. Treasury general funds, not the Social Security trust funds.

Some tea party mechanics were under the impression that the Postal System was paid for by the government.
They were wrong, the postal system is paid for by those who use it through the purchase of postage stamps.

Friday, August 26, 2011

Stimulus Bill

“If the right wing is successful in defeating Obama, the first thing they will do is pass a stimulus bill."

Ike Gittlen

Tuesday, August 23, 2011

Union Members-Check it out

 Rethinking Retirement: Focus on Income You Can Count On

After 27 years as a public high school teacher, Harry Sawyer was looking forward to a more relaxed life in retirement. But his monthly pension of $1,100 a month after taxes and health insurance was less than he and his wife, Liz, needed to cover their regular monthly bills.

Fortunately they had both invested in individual retirement accounts (IRAs). The big question: how to transform their IRA into income that could be counted on, month after month, whether the market was up or down.

As baby boomers keep marching into their 50s, 60s and 70s, this dilemma will become more and more common. For many retirees, the answer will be an income annuity.

An income annuity allows you to convert a sum of money from your savings (the premium) into a lifelong series of steady, guaranteed income each month, depending upon the option you choose.1 It’s a reliable and affordable way to help make sure you will have the income you need to cover living expenses in retirement.

That’s why Union Plus is offering union members an Annuity Program with more features and lower costs than similar programs offered through AARP and other sources. Free of agent fees or sales commissions, annuities offered through this program may provide higher monthly income than you may be able to generate on your own.  In exchange for these higher payments, an income annuity permanently converts your principal to a guaranteed income stream.

Make a plan for reliable income
During your working years, the emphasis is on growing your retirement savings. Once you retire, your strategy needs to shift to from growing to maintaining. (See http://retirement.unionplus.org for recommended steps to take.) But the income has to be sustainable, so you don’t outlive your money.

That’s where income annuities really shine. You can ensure your savings last for the rest of your life, your and a loved one’s life, or a specified number of years. Your income will vary depending on which annuity option you choose.

Four reasons to consider an income annuity:

1. Consistency. The payment is guaranteed, and you can count on being paid every month.
2. Stability. Your income won’t depend on the stock market and its ups and downs.
3. Simplicity. You don't have to study financial reports, monitor a portfolio, or buy and sell investments. Look for your monthly deposit into your checking/savings account each month.
4. Control. An American General income annuity purchased through the Union Plus Annuity Program isn’t at risk in the market, since it is a fixed annuity product purchased by you2.  It’s like having a retirement paycheck.


How much income can I receive from an income annuity?
Four factors determine your annuity income:

The amount of your premium.
The more money you put into an income annuity, the more monthly income you’ll receive.
Current annuity rates. The higher the rate, the higher your monthly payment will be. This rate is determined when you buy your annuity, based on factors such as the current rates of corporate bonds and long-term Treasuries. Your payment will also include some returned principal, not just interest.
The amount of agent fees and commissions you pay. The Union Plus Annuity Program eliminates this expense for union members, maximizing your monthly income.
The income option you choose.  You can choose guaranteed payments that continue for the rest of your life, your and a loved one’s life or for a specified number of years. You may also choose how often you receive annuity payments -- on a monthly, quarterly, semiannual or annual basis.

Would an income annuity be right for you?
First, estimate the amount of reliable monthly income you need by adding up all your fixed, nondiscretionary monthly expenses, such as mortgage or rent, groceries, insurance, and so on. Then subtract your expected monthly Social Security benefit and pension benefit. Whatever remains is spending that needs to be covered by another source of dependable income.

If you can easily pay your expenses out of savings, you may want to postpone buying an annuity. Just be sure not to wait until your savings are too depleted to generate the steady income you need. In any case, it’s highly likely that you shouldn’t plan to tie up more than 50 percent of your savings in an annuity. You’ll want to reserve the rest for discretionary spending, unexpected needs and growth.

What will you need to maintain your standard of living?

To find out how much income an annuity purchased through the Union Plus Annuity Program might provide, try the online calculator at UnionPlus.org/Annuities or call 1-877-244-1539 and speak with an experienced, non-commissioned annuity specialist. They’ll answer your questions and help determine if an income annuity is the best way for you to create sustainable income in retirement.

1 Guarantees are subject to the claims-paying ability of the life insurance company.

2American General Life Companies, www.americangeneral.com, (“American General”) is the marketing name for a group of affiliated domestic life insurers.

American General Life Companies insurers offer a full line of life insurance, annuities, accident & health products and worksite benefits to serve the financial and estate planning needs of its customers throughout the United States. 

This contract is not insured by the FDIC, the Federal Reserve Board or any similar agency. The contract is not a deposit or other obligation of, nor is it guaranteed or endorsed by, any bank or depository institution.

Source: UnonPlus

Sunday, August 07, 2011

I'll Miss Ray Bockman


Here’s a photo of Joyce Bockman on the left and Ray Bockman taking registrations for our SOAR Chapter Retirees Reunion. That was a job that Ray would ask for every year.
In 1979 there was a vacancy in the position of Grievance Committeeman in the NIPSCO Wabash Valley Division. At the time, Ray was the Grievance Committeeman in the Construction Department. Ray nominated me and because there were no other nominations, I got the job.
When I retired, we started a SOAR chapter for NIPSCO retirees and Ray and Joyce have always been faithful to our chapter.
I’ve never known Ray to be late for any event but always came early. He wouldn’t stand for anyone else being late either. He was quite a guy. He made a point of being at every NIPSCO stock holders meeting.
Ray was one of the most loyal and faithful union members I've ever known. I have a lot of great memories about Ray and I’m going to miss him.

Thursday, August 04, 2011

America Must Now Turn to Solving Job’s Deficit

WASHINGTON, D.C. (August 2, 2011) After the House and Senate passed legislation raising the debt ceiling and cutting as much as $2.4 trillion in spending over the next decade, the BlueGreen Alliance released the following statement from Executive Director David Foster:

“With more than 14 million Americans out of work, and with sluggish job growth over the last few months, immediate action is needed to put people to work and to ensure that the U.S. stays competitive in the 21st century.

“Unfortunately, the resolution to the manufactured debt-ceiling crisis does nothing to address the heart of America’s long-term economic problem: job creation. Slashing spending will not create jobs, it will not spur economic growth; it will only make it more difficult to solve America’s jobs crisis.

“Congress must now turn to solving America’s jobs deficit.

“Securing the jobs we have now and investing in the industries of the future — renewable energy, energy efficiency, advanced transportation and infrastructure, a smarter electrical grid, broadband internet, safer chemicals, and recycling — require market-based incentives and broad public-private partnerships. Our economic competitors have all adopted similar initiatives that are spurring job creation in manufacturing, construction, education and other sectors. This is our path to economic growth, global leadership, and to putting America back to work.

“The BlueGreen Alliance urges Congress to pass the strategic economic policies that will spur job creation in the industries of the future. If we don’t take action now, we risk taking the backseat as other countries like China take the lead in a global 21st century economy.”

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The BlueGreen Alliance is a national partnership of labor unions and environmental organizations dedicated to expanding the number and quality of jobs in the green economy. Launched in 2006, the strategic partnership now brings together 10 major U.S. labor unions and four of America's most influential environmental organizations and unites 14 million members and supporters in pursuit of good jobs, a clean environment and a green economy. Visit www.bluegreenalliance.org.