Most married men claim Social Security benefits at age 62 or 63, well short of Social Security's Full Retirement Age or the age at which they would get the most value from their benefits. The economic sacrifice isn't great for the men -- their benefit is less than 4 percent less than what it could optimally be if they waited to collect Social Security -- but for their widows, the impact is much more severe. The survivor benefit is on average nearly 20 percent less than its value would have been had the men waited to collect.

Very low incomes among elderly widows are already a major problem. If married men continue to claim as early as they do now, the problem could worsen as Social Security's Full Retirement Age rises, warns the Center for Retirement Research at Boston College.

Courtesy of ElderLawAnswers.com 

We mentioned several weeks ago the average Social Security check will go up about $24 bucks next year.  The increase is based on the Consumer Price Index (CPI) the government reports each year.   One economist thinks the CPI numbers are completely wrong.

Expert says feds stealing half of seniors' paychecks
Contends government manipulating data to keep cost-of-living index low

John Williams contends the U.S. government statistics intentionally understate inflation as measured by the Consumer Price Index, or CPI.

By understating CPI data, Williams argued, government officials are able to avoid increases in Social Security payments that are mandated by law as "cost of living adjustments."

The government's calculation of core inflation now excludes items such as food and energy, because food and energy "face volatile price movements."

In other words, since food and energy prices can spike, as they have this year, the Bureau of Labor Statistics calculates "core inflation" without them. The rationale is that the price shocks are temporary and, therefore, would distort the measurement of underlying long-term inflation.

True-we may want to look at our IRA accounts, our 401k plans and what kind of car we have in the driveway. 

Gasoline prices could rise as much as 20 cents in the next few weeks as the price at the pump catches up with the recent surge in oil costs, the head of the Energy Department’s analytical arm said today.

“We haven’t seen the full pass-through yet,” Energy Information Administration head Guy Caruso said.

If you are over age 70 1/2 it's time to add up your IRA balances, look at older 401k plans or employer plans and do the calculation.   Most IRA custodians will be able to help and even set up systematic withdrawals if  you would like to receive these distributions throughout the year.

You don't have to take distributions from your Roth IRA and new legislation allows you to contribute distributions to a charity in  2007.   Make sure to contact your tax advisor regarding these "qualified charitable distributions". 

Need some MRD help?  Visit the RetirementThink Calculators, Links and Tools page. 

Presidential candidates have been quiet on Social Security and retirement issues.   Obama presents his "Retirement Security Agenda".  Here's a fact sheet from the Obama campaign.

Barack Obama’s automatic workplace pension plan will dramatically increase both the number of Americans
who save for retirement and the overall amount of personal savings for individuals. Under this plan, employers
who do not currently offer a retirement plan, will be required to automatically enroll their employees in a directdeposit IRA account. Employees may opt-out by signing a written waiver. Even after enrollment, employees
will retain the right to change their savings levels, reallocate investment portfolios or end contributions to the
account. Obama’s plan will give options to the self-employed to access new easy-to-enroll savings plans and
direct the IRS to deposit tax refunds into those savings plans for people who choose to save some of their
refunds. Under the Obama plan when employees change jobs, their savings will be automatically rolled over
into the new employer’s system to ensure continued savings.

Here's an update on the TSP funds performance: Courtesy of FedSmith.com

And here are the results for the Lifecycle Funds for October:

An analysis of the Social Security "Trust Fund" shows we are not doing a credible job of keeping these promises. Official reports show the trust fund having assets of $2.1 trillion. In reality, those dollars are just IOUs the government is writing to itself when it borrows from the fund to spend on unrelated programs. There are no real assets in the Social Security Trust Fund. This is similar to taking money out of your savings account, spending it, then replacing it with an IOU to yourself, and calling that IOU an asset.

I have been working to reverse this trend. My Social Security Preservation Act, HR 219 would make sure this Trust Fund has real assets such as certificates of deposit in FDIC-insured institutions so that in 2017 and beyond, Social Security payments would continue for those who are depending on them.

Keeping Promises to Seniors- Courtesy of SafeHaven.com 

Seniors: Even if you are satisfied with your Medicare prescription-drug plan for 2007, you need to do some research before re-enrolling.

With the sign-up for next year beginning Nov. 15, some of the most popular providers are significantly increasing premiums and charges for drugs. Also, many plans have dropped or plan to drop coverage for certain medications.

A study by Avalere Health, a research and advisory firm, found that Medicare beneficiaries in the most popular plans will see a 21% increase on average in their 2008 monthly premiums. Some of the biggest providers built market share with low rates and are now significantly increasing them.

WSJ.com Sunday editon provides information on Medicare prescription- drug plans.

Visit Medicare.gov for complete information. 

Get ready for higher taxes.  The National Center For Policy Analysis gives us an advance warning on some of the tax hikes boomers can expect and some suggestions:

Workers planning to retire in the next 25 years will have fewer opportunities to save and will face a higher tax burden to boot.  What can be done to avert this impending disaster?   The aim should be to maximize the opportunities for baby boomers to earn and save without tax penalties, while restraining spending growth on elderly entitlements.  To do so, Congress should:

• Make the Bush tax cuts permanent — particularly the income, dividends and capital gains tax rates.
• Continue to raise the ceiling on retirement account contributions, and retain the higher “catch up” contribution allowed for 50-year old and older workers.
• To avoid payroll tax increases and slow the growth of Medicare spending, allow workers to contribute after-tax earnings to an account to “prepay” retirement health care expenditures.
• Similarly, allow younger baby boomers to prefund their Social Security benefits by saving some of their payroll taxes in personal retirement accounts, reducing their dependence on the pay-as-you go system.